GBP/JPY Price Forecast – British Pound Getting Overbought

The British pound has gone back and forth during the course of the trading session on Friday, as it looks like we are finally getting a little bit stretched. Ultimately, this is a market that I think continues to see a lot of noise, and I do believe that eventually we go higher. Having said that, the market has gotten too far ahead of itself and I believe that we could pull back to the ¥150 level without too much effort. I do like the idea of buying dips if and when we get an opportunity to do so, I would be all over it.

GBP/JPY Video 15.03.21

The market not only has support at the ¥150 level, but we also have a significant support level at the ¥147.50 level. Because of this, I think this remains a “buy on the dips” type of market, but you need to be very cautious about jumping in at these elevated levels. Longer-term, I believe that the market is going to go looking towards the ¥152.50 level, possibly even the ¥155 level. I have no interest whatsoever in shorting this pair, at least not until we break down below the ¥145 level. If we do, then that would be a significant reversal that people would be all over.

We are parabolic, and that is that most important thing that you need to pay attention to. This means that the market is very bullish, but you cannot jump in whenever. If you are already long in this market, then your next question is going to be where should I put my stop losses? Obviously, you have done quite well, but chasing the trade will give you an opportunity to lose a lot of money if you try it.

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