GBP/JPY Price Forecast – British pound continues to fall against Japanese yen

The British pound fell a majority of the session on Tuesday against the Japanese yen, as we continue to see a lot of volatility and concerns. Obviously, market participants will look at this as a risk barometer as per usual, and with that I think we are probably looking at an opportunity to see some type of bounce, but that bounce should give us an opportunity to sell from a higher level. When you look at the chart, you can see that the 20 day EMA is currently crossing the ¥135 level, and I think that is an area where you can probably see a lot of selling pressure if we do bounce towards that area.

GBP/JPY  Video 31.07.19

To the downside, I do believe that we will go looking towards the ¥131 level which is the 100% Fibonacci retracement level from the move higher. We are well below the 61.8% Fibonacci retracement level, and typically that’s what you see happen. Ultimately, I do believe that it is only a matter of time before we see sellers jump in on rallies, mainly because the Brexit is a bigger mess than ever, so I don’t see why anything would change here. Ultimately, I believe the ¥135 level will be massive resistance that it’s almost impossible to break, but even if we did keep in mind that it’s more of a “zone” that extends to the ¥136 level. Because of this, I am cautiously optimistic about shorting this market, but I also recognize that headlines could come out to send British pound into spasms.

Please let us know what you think in the comments below