GBP/JPY Price Forecast – British pound explodes higher

By exploding the way it did in such a short amount of time, the British pound has clearly shown just how important the Brexit is to it. With the Germans back in off their hard line stance a bit, that should help this go forward, and as soon as we get any type of certainty it’s very likely that this market will change trends. However, I would caution getting too deep into a position here, only because we have seen this play out recently. Ultimately, this is a market that I think will eventually get the Brexit it needs, and eventually the British pound will continue to climb. Remember, markets function more on certainty rather than reality. It doesn’t matter if the Brexit’s good, it just needs to exist.

We blew through a gap from the beginning of the week, so it’s obvious that there is a lot of volume behind this move. I think at this point, you’re probably going to need to wait for some type of short-term pullback to get involved if you aren’t already, and I think you should see plenty of support near the ¥144 level, on what will almost have to occur, pull back after a move like this. Overall, I believe that the trend is changing right before our very eyes, and therefore I am bullish of the British pound longer-term but recognize there will be a lot of noise between now and certainty. I would only add to positions that are clearly working out.

GBP/JPY  Video 06.09.18