GBP/JPY Price Forecast – British pound falls against yen

The British pound gapped lower at the open on Monday, and then tried to fill that gap. The market then broke down towards the 142.75 level, the scene of the massive rally we got recently as it was suggested that the EU and the UK were coming closer to a deal. By wiping this out, that is a very negative move to say the least. However, I think that it is only a matter of time before we do get some good news, but I think volatility is going to be nauseating over the next several months. Overall though, I think that the British pound is oversold longer term, so I think that as we tried to change the trend, and I do believe we are trying to do that overall, it makes sense that the markets will be very noisy as they typically are during the trend change.

In the short term, I think the ¥142 level will offer support, but if we break down below there I think that the market will then go to the ¥140 level. Overall, this is a market that will respect that level from what I see, but a break down below there would probably coincide with some type of negative headline coming out of the Brexit situation, or perhaps even the global trade situation as this market is highly sensitive to risk appetite. In general, this is a market that I think is offering value for the longer-term trader, but clearly in the short term we have some more negativity coming out into the marketplace. If we can turn around and break above the gap from the Monday open, then I think that would be a very bullish sign.

GBP/JPY  Video 04.09.18