GBP/JPY Price Forecast – British Pound Continues To Grind Higher Against Japanese Yen

The British pound continues to grind a little bit higher against the Japanese Jen, in more of a “risk on” situation coming out of the weekend. Ultimately, the market is well above the 200-day EMA so the technical analysis certainly would suggest that we should go higher.
Christopher Lewis
GBP/JPY daily chart, October 22, 2019

The British pound has initially gapped lower to kick off the trading session on Monday, but then turned around to show signs of strength again. Ultimately, the British pound continues to be bought in signs of hope with the Brexit situation possibly moving forward. Granted, the UK Parliament has simply delayed the movement, but it seems as if there is significant progress being made eventually. That being said, this is a market that has gotten itself far ahead of reality, so it would make sense that a pullback should be coming.

GBP/JPY  Video 22.10.19

Ultimately, this market probably goes higher and it certainly looks as if the market is trying to change the overall trend. The British pound is historically cheap, and if we get that move to the upside there should eventually be some type of massive pullback that you can take advantage of. Buying up here above the ¥140 level is “paying up” for the pound, and a good way to get hurt. Simply waiting for some type of pullback to offer value is probably the best way to go. The 200-day EMA underneath could be support, just as the ¥135 level could be. Buying on a break above the top of the candlestick, although technically feasible, seems to be a bit dangerous as the market has moved 1000 pips over the last couple of weeks. Ultimately, this is a market that can’t be sold but should be looked at as a value proposition.

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