GBP/JPY Price Forecast – British Pound Continues to Grind Sideways

The British pound rallied initially during the trading session on Wednesday but has given up some of the gains towards the top of the range yet again. The ¥138 level above looms large as resistance, so if we continue to struggle in this area, I think we could very well see a bit of a pullback. Do not get me wrong, I am not calling for some type of meltdown, only a simple continuation of the overall consolidation that we have seen. After all, Brexit still looms large and causes major issues when it comes to holding the British pound.

GBP/JPY Video 22.10.20

At this point, I think the market is simply going to continue to go sideways and look a bit lost, because quite frankly this is a very risk sensitive pair, and of course with Brexit willing to drop a bomb at any given moment, it is a bit difficult to get overly excited. Furthermore, the USD/JPY pair has collapsed through major support during the day, and that does show a bit of strength in the Japanese yen against multiple currencies, so it has a bit of a “knock on effect” over here.

All things being equal, I think that we continue to go back and forth and simply trying to find some type of catalyst to get moving. Over the next couple of days, I anticipate that we will simply bounce around these two moving averages on the chart, the 50 and the 200 day EMA indicators to offer short-term trading opportunities at best. Longer-term, it is very likely that we will eventually try to go higher but we need some type of good news involving Brexit before that truly happens.

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