GBP/JPY Price Forecast – British Pound Continues to Strengthen

The British pound has rallied again during the course of the trading session on Wednesday as we continue to see the Japanese yen get hammered in general. The British pound has been one of the better performers over the last several weeks, so this does make a certain amount of sense that we would see this happen. Ultimately, I do think that this market continues to go much higher, perhaps reaching towards the ¥155 level once we finally make a little bit more of a breakout. The ¥155 level of course has a certain amount of psychological importance built into it, so I would anticipate a bit of a struggle in that general vicinity.

GBP/JPY Video 13.05.21

Looking out the set up, we had a very strong and impulsive candlestick followed by a neutral candlestick. When you break the top of that neutral candlestick, typically that means there is a certain amount of follow-through that will come down the road as traders look for continued gains and perhaps even more importantly, a continuation of the overall trend that has been so ensconced in this market for quite some time. With that being the case, I think that buying short-term dips should continue to work, as we almost certainly will go looking towards the crucial ¥155 level. Given enough time, I think will even break above there and go looking towards the ¥160 level, but that is probably a story for several months down the road. Underneath, I see the gap from the open on Monday as being rather supportive, so I think that is essentially your “floor in the market” currently.

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