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GBP/JPY Price Forecast – British Pound Gaps Lower Against Japanese Yen

By:
Christopher Lewis
Updated: Jan 27, 2020, 15:56 UTC

The British pound gapped lower during the open on Monday and has since bounced around against the Japanese yen as we reached towards the 50 day EMA. At this point though, the world seems to be in more of a “risk off” manner.

yen

The British pound has gapped lower to kick off the trading week against the Japanese yen, in a sign of global “risk off” trading. We had seen this move in several other currencies, as people start to worry about the coronavirus and whatever the latest story is. Technically speaking, the market had shown signs of weakness the previous week, and now it looks like we could roll over a bit. When you look at the weekly chart, there have been a couple of shooting stars in a row, and that of course is a very negative sign. To the downside, we could be targeting ¥141 relatively easily.

GBP/JPY  Video 28.01.20

That being said, if we can break down below the ¥141 level, it’s likely that we will then test the ¥140 level. That is the middle of the bullish flag from previous trading that should send this market much higher, but ultimately, it’s only a matter of time before the buyers probably return. This being said, it looks as if traders are willing to take profits, and therefore it’s possible that we go looking towards the ¥148 level longer-term, and the next couple of days will be crucial as to whether or not this is a simple pullback, or if we are trying to break down significantly. Looking at this chart, the market will continue to be very sensitive to not only risk appetite around the world but the latest headline of Brexit. To the upside, the target of ¥148 makes quite a bit of sense based upon the previous bullish flag. That doesn’t mean we get there tomorrow though.

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About the Author

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.

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