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

The British pound initially tried to rally during the trading session on Wednesday, reaching towards the 50 day EMA and of course the 200 day EMA. At this point, the market looks very likely to see a lot of choppiness and volatility, so therefore I think technical traders could be jumping in and pushing lower.

GBP/JPY Video 08.10.20

Looking at this chart, it could open up a move down to the ¥135 level, which of course has been supported. I think there are far too many moving pieces out there when it comes to Brexit in order to feel comfortable trying to simply buy-and-hold or sell and walk away. The British pound will continue to be a lot of volatility just waiting to happen, so having said that I think that you are better off keeping a smaller position than a big one, and therefore protecting yourself against the latest headline involving Brexit or risk appetite in general.

Remember, the Japanese yen is considered to be a safety currency, so it does make quite a bit of sense that we would see markets fall and go looking towards the ¥135 level. To the upside, if we can break above the ¥137 level, then it is possible that we could go to the ¥140 level. Having said that, that probably only happens if we get some type of Brexit deal, something that we have not been able to do for years. Looking at this choppiness, I think you need to trade shorter-term charts more than anything else.

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