GBP/JPY Price Forecast – British Pound Continues to Power Higher

The British pound rallied significantly during the trading session on Thursday again, as it looks like we are trying to break out. That being said, there are a lot of concerns when it comes to the British pound, and of course the UK economy as the markets have to price and the idea of further lockdowns. However, they seem to be looking past the coronavirus situation because of the vaccine being available, and therefore we begin to focus on the idea of life after Brexit.

GBP/JPY Video 08.01.2021

There could be problems with the UK economy for sure, but the British pound is of course historically cheap at this point in time, and therefore it is likely that we continue to see this market try to rally given enough time. I think short-term pullbacks will continue to offer a certain amount of support near the 50 day EMA underneath as well, so there really is not a scenario in which a willing to sell this market.

Do not get me wrong, I do not necessarily think we go straight up in the air, but I do think it is more of a grind higher that we will continue to see. If we can break above the highs and go looking above, then the ¥142.50 level would be targeted, followed by the psychologically and structurally important ¥145 level. To the downside, it is not until we break down below the black 200 day EMA that I begin to worry about the overall trend.

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