GBP/JPY Price Forecast – British Pound Continues Noisy Behavior

Boris Johnson is flying to Brussels and that of course has British pound traders waiting to see what happens with Brexit. That being said, we had initially sold off quite quickly to kick off the Tuesday session, as it was suggested that the idea of a deal was rather bleak. However, later in the day we had an EU officials suggesting that “an agreement in principle” on most of the sticking points seems to be coming to fruition. Obviously, this is a rumor it cannot be traded with any great faith, but it did send the British pound back towards the opening price.

GBP/JPY Video 09.12.20

All things being equal, it is obvious that the British pound wants to go higher, but we need some type of deal before that can happen with any type of link. Ultimately, this is a market that I think continues to see plenty of support at the 50 day EMA as well as the 200 day EMA. With this, the market is likely to continue to target the ¥140 level which is an area that is a large, round, psychologically significant figure and of course an area that is recent resistance.

I have no interest in selling this pair anytime soon, unless of course we actually get a “no deal Brexit”, simply because it is obvious that there are buyers every time it dips, so there is no point whatsoever in trying to fight the behavior of the market. Furthermore, the British pound is undervalued from a historical standpoint and a lot of people will continue to look at it as being “cheap” as far as history is concerned and want to own the currency for the bigger move.

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