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GBP/JPY Price Forecast – British pound continues to chop

The British pound initially surged higher during the session on Wednesday, reaching as high as the ¥148.25 level, but then pulled back as fears of a no deal Brexit pick it back up. However, since then we have seen a certain amount of buying pressure based upon the previous consolidation area resistance, so it looks as if the buyers are trying to step in.
Christopher Lewis
GBP/JPY daily chart, October 04, 2018

The British pound initially rallied during the trading session on Wednesday, but then pulled back as fears of a “no deal Brexit” became headlines again. Ultimately, I think that smart money is down here picking up the British pound “on the cheap”, they also recognize that the Japanese yen is an offering much in the way of attraction these days. If you look at the ¥147.50 level, you can see this was previous resistance that now has acted as perfect support in the form of an hourly hammer. Because of this, I have interest in going long, especially if the US stock markets start to pick up during the day, which they seem to do in defiance of what’s going on in the European Union.

If we did break down from here, I suspect that the ¥147.25 level will also offer support, so it’s only a matter of time before somebody is going to step in and get long of this market. I think that we will eventually continue to try to drive higher, and the British pound looks as if it is putting up a fight against several other currencies simultaneously, so I think this is more of what we have seen lately, a few sensationalized headlines that offer buying opportunities. Because of this, I don’t have much in the way of interest in shorting the British pound these days. I recognize that isn’t going to be easy, but I still believe that the upside is the way to be looking.

GBP/JPY  Video 04.10.18

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