GBP/JPY Price Forecast – British Pound Gives Up Early Gains

The British pound has rallied initially during the trading session on Tuesday to reach towards the ¥151 level. That is an area that ended up causing major resistance though, as the 200 day EMA sits right there. As a result, we have given back quite a bit of significant gains, and now it looks as if we are forming some type of shooting star. Underneath, we have the ¥150 level, an area that would attract quite a bit of attention, as it is slicing through the noisy behavior in that general vicinity.

GBP/JPY Video 08.12.21

The ¥149 level underneath is the bottom of the overall support level, so if we were to break down below that level, then I think it opens up the market for a major sell off, perhaps reaching towards the ¥145 level. That being said, it is going to take a significant amount of downward pressure make that happen. Quite frankly, I would not be surprised at all to see this market continue to consolidate in the same general vicinity that it has been in, as denoted by the purple box on the chart.

All things been equal, this is a market that has a lot of decisions to make in the short term, so I think you are probably better off waiting to see which way this market breaks, perhaps on a daily close and then simply following. You should also keep in mind that this market is highly sensitive to risk appetite, going up when traders feel better and dropping one traders feel a bit more risk-averse. Keep an eye on all markets, as you can get a general feel for how traders are likely to trade this market.

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