GBP/JPY Price Forecast – British Pound Continuing to Grind

The British pound has rallied initially during the trading session on Tuesday but gave back the gains at the very time, as we continue to struggle in general. This makes sense because we need to worry about whether or not the Brexit situation is going to get better or worse. People are starting to bank on a Brexit deal sometime this week, but one has to think that the longer we get into the week, the more nervous people get. This is why I think the ¥140 level above is so crucial. If we can break above there then fine, the market is going to go much higher. Until then, I have to believe that the ¥140 level will continue to be very difficult.

GBP/JPY Video 25.11.20

All things being equal I believe it is only a matter of time before we see some type of clarity, and once we do then it will be much easier market to trade. If we get some type of sell off, I believe that the ¥137.50 level should be rather supportive, and therefore I would anticipate that we see buyers in that general vicinity. Between now and whatever final situation, we find ourselves and for Brexit, it is going to be very noisy and therefore I think you have to look at this more or less as a range bound market.

Yes, it certainly tilts to the upside, but the reality is that there is much more downside risk right now than up. If the market does get the Brexit deal, then we will go higher but one has to think that if we get a “no deal Brexit”, that would be a shock that would almost certainly send the pound crashing.

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