GBP/JPY Price Forecast – British pound continues to fall

The British pound rallied a bit during the trading session on Wednesday but then rolled right back over to break below the bottom of the inverted hammer that had formed during the previous session. At this point, the ¥140.50 level is being tested but I believe the ¥140 level will probably be tested as well. This is also the 50% Fibonacci retracement level from the move from the bottom, so I think there will be a certain amount of interest in this area, especially considering that it coincides nicely with the huge round number.

GBP/JPY  Video 16.05.19

If we do break down below that level, then it’s likely that we will go looking towards the 61.8% Fibonacci retracement level, near the ¥138 level which also has seen significant support in the past. That being the case, it’s very likely that we are going to find buyers sooner or later, the question is whether or not we do it at the ¥140 level, or are we going to do it at the ¥138 level? If you are looking to short this pair, you have probably missed the move. However, if we get some type of supportive daily candle stick, then that could be your opportunity to pick up a trade and perhaps even more importantly the British pound “on the cheap.”

That being said, it’s a matter of patience at this point as shorting this market was something that probably should have been done several days ago. I would not chase the trade here, because quite frankly the markets are very erratic and course we have that whole Brexit thing going on as well.

Please let us know what you think in the comments below