GBP/JPY Price Forecast – British Pound Dress Lower

The British pound initially tried to rally during the trading session on Monday but gave back the gains as we continue to see a lot of trouble around the ¥135 level. At this point, it’s obvious that we are in a huge “risk off environment”, and that does not bode well for the pair. The 50 day EMA is sitting just above so it makes sense that perhaps some longer-term traders are looking at shorting. Furthermore, the British economy is going to be locked down much longer than many of the other economies around the world, so I think it makes quite a bit of sense that we see a bit of a drop from here.

GBP/JPY Video 21.04.20

To the downside I think the 132.50 level will more than likely be targeted, as it has been significant support in the past. If we can break down through there, then the ¥130 level would be next. I have no interest in buying this pair, at least not at this point because of how much negativity there is out there, and of course the fact that the market has gotten a bit frothy. What’s even more interesting to me though is the fact that we seem to be running out of momentum in general. Rate of change is one of the things that traders don’t pay enough attention to, which sometimes can be thought of as momentum as well. We are simply losing the overall upward momentum in this pair, so I remain negative, but recognize that it will be very choppy.