GBP/JPY Price Forecast – British pound continues to look soft

The British pound broke a bit during the trading session on Thursday, as we continue to see a lot of softness in the British pound. After all, we have the Brexit going on and of course the Japanese yen is considered to be a safety currency.
Christopher Lewis
GBP/JPY daily chart, August 09, 2019

Prefer to wait for signs of exhaustion after short-term rally to take advantage of it. I think at this point we are likely to test the ¥127.50 level, followed by the ¥125 level. The British pound pulled back a bit during the trading session on Thursday as we continue to see a lot of selling pressure against the British pound in general. This is a market that is highly sensitive to risk appetite, so it does make sense that we have been very negative. Beyond that, the Brexit is nowhere near being solved, and therefore I think that any type of rally at this point should be thought of as an opportunity to sell this pair from a higher level. Quite frankly, this is a market that is ready to go much lower at the first signs of trouble.

GBP/JPY  Video 08.08.19

We are below the 100% Fibonacci retracement level and perhaps even more importantly the ¥130 level. Even if we break above the ¥130 level, the ¥132 level is the next scene of selling pressure. After that, we have the ¥135 level offering even more resistance. Ultimately, I think that this market will continue to find plenty of reasons to fall apart, so I wait for rallies that show signs of exhaustion to take advantage of those opportunities. Ultimately, I think that this market will eventually go looking towards the ¥127.50 level, followed by the ¥125 level after that. Until we have some type of resolution to the Brexit, it’s difficult to imagine that rallies will be sustainable.

Please let us know what you think in the comments below

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