GBP/JPY Price Forecast – British pound drift lower

The British pound fell again against the Japanese yen on Wednesday, reaching down to the ¥144 level. If we can break down below the lows of the trading session on Tuesday, then I think it opens the door to the ¥142.50 level. That is an area that has been important previously, so therefore it’s not a huge surprise that we could see some support again. If you look at this chart, you can make out a bit of a bearish flag that has just broken down, so we could go much lower. That flag measures for a move towards the ¥141 level, which I think is the beginning of significant support down to the ¥140 level.

GBP/JPY  Video 05.12.18

I believe that this pair will continue to be very sensitive to geopolitical headlines, but without a doubt the most important influence on the pair right now as the Brexit, which is a long way from being settled. As long as there is uncertainty, there will be negativity in this pair. The US/China trade tariffs war seems to be cooling off a little bit, so that does help but in the end this is going to be about Parliament and whether or not they approve an agreement, which right now I don’t know if they do.

In the meantime, I suspect that the market will offer plenty of selling opportunities on rallies that show signs of exhaustion. You may have to look to the short-term charts to do so, but I do believe in fading those bullish moves.