GBP/JPY Price Forecast – British pound finding support

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Updated: Aug 18, 2018, 05:10 UTC

The British pound continues to find support at the ¥140 level, as the selling has abated a bit. Obviously though, we have concerns about the Brexit, and of course the global headlines continue to cause issues. With that in mind, be very cautious but it does start to look like there may be a glimmer of hope.

There has been a strong snapback from the ¥140 level during the week, and Friday Saul a retest of that area which at the time of recording still holds. However, if we were to make a fresh, new lows, that could send this pair tumbling. What I would say is that the weekly candle is somewhat neutral, so it shows that at least maybe some of the selling pressure is starting to wear off. Some of the early buyers may be jumping in, and I think that the ¥140 level will continue to be very difficult to break. However, if it does I think that this market will probably unwind towards the ¥137 level rather quickly.

Because of this, short-term traders may continue to try to play the bounce, but that’s a dangerous game to say the least. If we can recapture the ¥141.25 level, that would at least be something to hang your hat on. I believe that we continue to go sideways overall but remember that this pair is highly sensitive to the US and Chinese relations, and the Brexit as well. The ironic thing is that if we get good news in both of those fronts, this pair will probably be explosive to the upside, while nobody seems to be looking. This could be a trade setting up, but I would be very cautious and use very small amounts of your trading capital initially.

GBP/JPY Video 20.08.18

About the Author

Christopher Lewisauthor

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.