GBP/JPY Price Forecast – British Pound Continues to Await Announcement

The British pound initially fell during the trading session on Tuesday, breaking below the 50 day EMA against the Japanese yen. However, when you look at the charts you can see that there are buyers underneath, just as we had seen during the trading session on Monday. A lot of this comes down to people believing that Boris Johnson will in fact give a little bit when it comes to the Brexit negotiations, just as we had seen rumors of movement on fisheries during the Monday session. That being said, this is a market that still struggles with the idea of breaking above the ¥140 level.

GBP/JPY Video 22.12.20

If we were to break above that level, it would be an extraordinarily bullish sign, but only if we get a daily close above that level. At that point, I would anticipate that the market goes to the ¥142.50 level, possibly even higher than that. On the other hand, if we break down from here somewhere between the 50 day and the 200 day EMA you should see quite a bit of support. This of course assumes that there is some type of agreement still possible between the UK and the EU. We are most certainly getting close to the end of the year, so the longer this takes, the more that becomes an actual threat.

At this point, it looks like you just simply jump in and pick up dips as they occur, but for short-term trades. Having said that, you need to be very cautious with your position size due to the fact that sudden news flow could send this market in either direction at a rapid pace.

For a look at all of today’s economic events, check out our economic calendar.