GBP/JPY Price Forecast – British pound continues to suffer

The British pound initially try to rally during the day on Monday but struggled to keep gains against the Japanese yen which makes sense considering the election results. With that being said, this is more of a “risk off” move than anything else, and therefore it’s very unlikely that we would see gains being held. Ultimately, this is a scenario where market participants are probably selling the British pound every time it rallies as there are so many negative headwinds out there.

GBP/JPY  Video 28.05.19

Keep in mind that this doesn’t only move to the Brexit noise, but it also moves to the noise involving the global markets. If there’s more of a “risk off” rally, that almost always favors the Japanese yen. Technically speaking, it looks as if breaking below the ¥138 level could open up the door down to the ¥135 level. Rallies are still to be sold, as there’s no definitive proof that the attitude is changing anytime soon. I’d be a bit skittish about owning this pair but if we can get some type of US/China trade deal worked out, it could be interesting to see how this plays out over here.

To the upside, I believe that the ¥140 level is still major resistance, so a break above there would of course be a huge turn of events and could have market participants flooding into the market to pick up value. Not necessarily holding my breath on that one, just observing that area as being important at this point in time.

Please let us know what you think in the comments below