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

The British pound initially rallied against the Japanese yen during early trading on Wednesday but gave back the gains rather quickly as a bit of “risk off” came back into the markets. The ¥142.50 level is an area that as somewhat significant from a longer-term perspective, so breaking above the top of the Wednesday candlestick would be a very bullish sign. Initially, it looks like we are going to launch higher, but it appears that we have given that up, as we now are likely to continue seeing more choppiness.

GBP/JPY Video 28.01.21

To the downside, I believe that the ¥140 level is significant support and will more than likely continue to be attractive for buyers looking for value, not only due to the fact that it is the structurally important level, but it is also where we now find the 50 day EMA. With that in mind, I think that buying on the dips continues to work in this marketplace, and I do think that eventually we go looking towards the ¥145 level.

It looks as if the British pound is trying to break out basically everywhere, as people take advantage of the historically cheap exchange rate. That being said, if we do get a huge “risk on” type of move around the world, that might be reason enough for this pair to go higher as well. I have no interest in selling anytime soon, but if we break down below the ¥139 level, I will have to start rethinking some things.

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