GBP/JPY Price Forecast – British Pound Continues to Build Base

The British pound has gone back and forth during the trading session on Wednesday as we continue to try to build a bit of a base just above the ¥152.50 level. This is an area that previously had been major resistance, so therefore it makes quite a bit of sense that it would be supported now. As long as we can stay above this area, I think it is much likely that we will go higher. A break above the 50 day EMA allows for the market to go looking towards the ¥155 level, which is an area that has a certain amount of psychological importance. If we break above that massive negative candle that sliced through that level, then we will more than likely continue the overall move higher.

GBP/JPY Video 11.11.21

Keep in mind that most of the selloff had been produced by the Bank of England, which suggested that they were not going to taper bond buying in the short term, but that does not necessarily mean that they will not do it later. Furthermore, the Japanese yen is being hammered against multiple currencies, so if the British pound can recover a bit overall, this could be a great trade to set up.

Even if we break down below the ¥152.50 level, the market probably goes looking towards the 200 day EMA underneath. That is an area that continues to be important, because quite frankly if we break down below that level, it is very likely that we end up changing the entire trend and sell off quite stringently. This would also be a major turn of events and probably send the market into a severely negative attitude.

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