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

The British pound initially tried to rally during the trading session on Thursday but then rolled over to reach down towards the ¥132 level and break through it again. At this point, the market is very likely to continue to go lower, perhaps reaching down to the 100% Fibonacci retracement level. As we had broken so significantly below the 61.8% Fibonacci retracement level, it makes sense that we do wipe out the entirety of the move, and quite frankly we are almost there now.

GBP/JPY  Video 02.08.19

Obviously, the market is one that should be sold every time it rallies, as the Brexit continues to weigh upon the British pound in general. We have no idea what’s going on next, and ultimately this is a market that needs to see some type of progress in the Brexit to turn around. I believe that we also have enough geopolitical concern out there to keep the Japanese yen in vogue, so ultimately this is a market that continues to drift lower. In fact, I don’t have a scenario where I’m a buyer, at least not until the Brexit situation gets solved, and we all know that seems to be allusive to say the least.

If we do break down below the ¥130 level, that opens up a big “flush lower” in this pair that could really start to pick up momentum. With that, I would become more aggressive to the short side again, but quite frankly I would rather see some type of short-term bounce to take advantage of.

Please let us know what you think in the comments below