GBP/JPY Price Forecast – British Pound Continues To Struggle at Same Level Against YenThe British pound has pulled back after rallying against the Japanese yen during the trading session on Monday, initially showing significant strength but continuing to have issues at the ¥134.50 level.
The British pound initially had a very strong showing on Monday, breaking well above the ¥134 level. However, we have seen a lot of resistance above the ¥134 level recently, and it appears that we are going to see more of the same. The pair is essentially consolidating, struggling just below the ¥135 level which of course is a psychologically significant figure, but we also have the 50% Fibonacci retracement level just above that level and furthermore we have recently seen the 50 day EMA break below the 200 day EMA, all of which are negative side.
GBP/JPY Video 07.04.20
This doesn’t necessarily mean that the market is going to collapse, but it clearly is running into a lot of resistance. It is worth noting that while the stock markets around the world had rocketed to the upside, this risk sensitive currency pair did flounder a bit. Because of this, it leads me to believe that we are quite ready to break out. If that’s going to be the case, it’s very likely that we are going to grind back and forth. That being said though, the market can break above the ¥135 level that would be an extraordinarily bullish sign and could send this market towards the ¥137 level.
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To the downside, there is a significant amount of support near the ¥132.50 level. Breaking down below there would of course be an extraordinarily negative sign and have traders coming in to start shorting this pair again. At that point, I believe that the market will make a move towards the ¥130 level which has both structural and psychological importance.