GBP/JPY Price Forecast – British pound gapped lower against Japanese yen amid chaosThe British pound gapped lower against the Japanese yen to kick off the week on Monday as the tensions in the Middle East and more importantly the drone attacks have caused a lot of fear.
The British pound gapped lower against the Japanese yen during the open on Monday, and then went back and forth rather violently. All things being equal, the ¥135 level should offer plenty of resistance, as it is a large, round, psychologically significant figure, and of course the scene of the 38.2% Fibonacci retracement level. The area also had seen a lot of selling pressure previously, and the fact that the market is so overextended makes quite a bit of sense for a pullback. The pullback could go down to the 50 day EMA which is red, near the ¥132 level.
GBP/JPY Video 17.09.19
Looking at this chart, if we were to break above the ¥136 level, then we probably go towards the 200 day EMA. The 200 day EMA is going to offer a significant amount of resistance, so if we show signs of exhaustion there, then the market could break down rather significantly as it is also the 50% Fibonacci retracement level. Either way, this is a market that has gotten over extended and gone parabolic, so having said that we need to get a bit of a pullback anyway. Ultimately, with everything that’s going on in Saudi Arabia and the entirety of the concerns about global growth makes quite a bit of sense that we see a pullback here and a rush towards the Japanese yen given enough time. All things being equal, I believe that this market is going to be sold given enough time, but we are obviously going to have a lot of volatility going forward.
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