GBP/JPY Price Forecast – British Pound Finds 200 Day EMA as Support

The British pound fell hard against the Japanese yen to kick off the trading session on Tuesday but has found buyers just below the 200 day EMA. We had previously formed a hammer in this area so it should not be a huge surprise to see that the market found a bit of support in this area. With that being the case, this signals that there could be more “risk on” trading going forward, and at this point that would not be such a huge surprise. After all, central banks continue to flood the world with liquidity, and right now that is all people are trading.

GBP/JPY Video 10.06.20

Going forward, I do believe that it is only a matter of time before we try to test the ¥140 level rather seriously, which I think is a signal that we are going to go higher, perhaps reaching towards the ¥144 level. To the downside, the ¥135 level also offers support, so I think it is only a matter of time before the buyers get involved anyway. The market looks as if it is trying to find some type of range, and quite frankly with this pair, volatility is always at the forefront. If we see a significant amount of push to the upside, we could be looking at the beginning of a longer-term trend change. All things being equal, this is a market that looks as if it is going to try to continue to grind higher, but headline risk is always an issue.

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