GBP/JPY Price Forecast – British pound falls slightlyThe British pound fell slightly against the Japanese yen during trading on Friday, as traders probably are covering risk going into the weekend. Keep in mind that this pair is highly sensitive to the trade relations between the United States and China, which currently look rocky at best.
The British pound has pulled back slightly during the trading session on Friday, as we continue to bounce around overall. It looks as if the market is going to continue to be back and forth, and simply choppy. I think that headlines will continue to push this market around, with the president of the United States willing to tweet at any moment. A few words can move this market rather rapidly. Overall, I think that we probably have more downward pressure than up, so I do like the idea of selling rallies as they appear and show signs of exhaustion.
GBP/JPY Video 10.12.18
This pair has a lot of support down at the ¥143 level, as well as a lot of resistance above at the ¥145 level. Ultimately, I think if we can break above the ¥145 level, then the ¥146 level will be targeted. We are in the longer-term downtrend though, so I do think that it’s easier to short this pair on signs of exhaustion. Breaking down below the ¥143 level opens the door to the ¥141 level, perhaps even the ¥140 level. All it’s going to take is some type of negativity coming out that will scare traders.
Beyond that, the Brexit of course is going to cause a lot of headline so keep that in mind as well. A lot of headlines can come out of London that will scare off the British pound traders as well. I believe in fading rallies.