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

The British pound initially rallied on Wednesday but gave back the gains at the highs of the Tuesday candlestick to turn around and sir falling again. The market looks as if it is being threatened to the downside, and with the release of a disappointing ADP number in the United States, it suggests that perhaps the economic recovery is not as strong as people had thought. If that is going to be the case, then we will have a decidedly “risk off move” around the world, meaning that the Japanese yen becomes much more attractive than the reddish pound.

GBP/JPY Video 05.08.21

Furthermore, we have failed at the ¥152.50 level and drifted lower. This was essentially “fair value” of the most recent consolidation range, so I think at this point it does make quite a bit of sense that we eventually go looking towards the ¥150 level. The ¥150 level of course would be an area that would have a certain amount of psychological attached to it as well. Keep in mind that we had bounced from there previously, after forming a nice-looking hammer. That probably makes it tough to break through, but it certainly looks like we are going to at least ask questions of that region.

If and when we do, all eyes will be on this pair because of we break down below that level significantly, it more than likely would open up the possibility of a move to the ¥145 level, and then eventually even the ¥140 level underneath. There does seem to be a lot of unease just below the surface around the markets right now, so that is not completely out of the question.

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