GBP/JPY Price Forecast – British Pound Continues to Flex Its Muscles

The British pound has initially fallen during trading to open up the week but has turned back around to show signs of life again. By bouncing the way, it has, this suggests that the market is in fact going to try to reach towards that gap above at the ¥137 level. That would be a very bullish move, and quite frankly make quite a bit of sense considering that the 200 day EMA is sitting around that area.

GBP/JPY Video 31.03.20

One thing that is very tempting to do is to look at the volatility in this pair and suggest that it can’t go forward like this, but quite frankly we are living through pretty extraordinary times. I have not seen trading conditions like this since the great financial crisis, over a decade ago. With that in mind it’s very possible that we continue to thrash around the way we have. Under normal circumstances, the move would be overextended to the upside, but considering how things have gone elsewhere, it’s difficult to imagine much in the way of change.

If we do pull back for some reason, I believe that the 130 in level should attract a lot of buying pressure, but at this point we are simply moving on the latest headlines, which can change at any given moment. With that being the case, you should be very cautious about your position size and simply realize that the market conditions warrant extreme caution at this point, especially when it comes to a position size. Remember, you trade the market that is offered, not the one that you wish happens. By dialing down leverage in aiming for bigger moves, you get the same effect that you normally would in normal market conditions.