GBP/JPY Price Forecast – British pound continues to find short-term support

The British pound has initially pulled back during the trading session on Thursday, but then rallied towards the ¥130 level yet again. This is an area that seems to be very attractive for traders, and as we are at the end of the summer, it makes sense that we are a little lackluster in the movement. Ultimately, I do believe that we will get a resolution, but it may be next week before it happens. That being said though, we all know that it’s only a matter of time before headline comes out of London that sends this market in one direction or the other.

GBP/JPY  Video 30.08.19

Looking at the technical analysis it makes sense that we would continue to go lower, because we are setting up a rising wedge which is bearish in and of itself. If we break down below the bottom of the uptrend line underneath, it’s likely that we grind down to the ¥126 level. Beyond all of that, the 50 day EMA sits above at the ¥132.50 level, an area that has short-term clustering that could also cause issues. After that, then the sellers reappear somewhere near the ¥135 level. We are in a downtrend, and that something that we should not forget, even though we’ve had a nice bounce. We are heading towards a “no deal Brexit”, and at this point the Japanese yen continues to attract a lot of flow anyway due to the geopolitical and trade tensions around the world. At this point, a break down below the uptrend line has me selling, just as some type of exhaustive candle above will.

Please let us know what you think in the comments below