GBP/JPY Price Forecast – British pound falls slightly against Japanese yen on WednesdayThe British pound fell slightly during the trading session on Wednesday in anticipation of the FOMC meeting and the ECB meeting on Thursday. I believe that the market will continue to pay attention to risk appetite overall, and now that we have gotten through the summit between the Americans and the North Koreans, there is a collective sigh of relief.
The British pound pulled back slightly during the trading session on Wednesday, reaching down towards the ¥147.25 before bouncing. The ¥148 level above has offered resistance, and if we can break above there, the market is likely to go to the ¥150 level. I think that all we need is a bit of a “risk on” move, and I would pay attention to the stock markets around the world to give us an idea as to where that’s going. Simply put, this pair will rally right along with them. Obviously, if the stock markets fall, that puts bearish pressure on the GBP/JPY pair.
The ¥150 level will of course be very important from a psychological standpoint, as well as structural as we have seen the market fall from their previously. If we can break above that level, the market would be free to go much higher. I believe that the ¥145 level underneath is very supportive as well. I believe that short-term pullbacks give us a buying opportunity based upon value, but if we get a sudden geopolitical issue, or some type of selloff in the stock markets, that should send this market back down towards the ¥145 level, and perhaps even below there. If we break down below the ¥145 level, that would be very negative indeed. The one thing that does have me concerned about this pair is that we have a bit of a divergence on the MACD indicator.