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GBP/JPY Price Forecast – British pound gives up gains

The British pound tried to turn around and rally during the trading session after a horrible session the previous day on Tuesday. The market has formed a very ugly looking candle stick, and it looks like we are going to continue to see major issues.
Christopher Lewis
GBP/JPY daily chart, December 12, 2018

The British pound rallied a bit during the trading session on Tuesday but gave back quite a bit of the gains at the ¥143 level. By doing so, we ended up forming a shooting star, or something like that. Ultimately, I think that the market could very well break down below, perhaps reaching towards the ¥141 level, maybe even the ¥140 level. I do not like the idea of going along this market, and I believe that it is only a matter of time before every rally get sold off. This makes sense, because of the concerns about the Brexit, and of course the fact that this pair is highly sensitive to global trade and markets overall.

GBP/JPY  Video 12.12.18

Ultimately, I think that this market will continue to be one that people come in and punish every time it tries to rally, and quite frankly we have been in a downward channel for some time. You can see the red downtrend line on the chart is massive resistance, and it’s not until we break above that line that I could consider going long. I believe that the ¥145 level will be enough resistance to continue to go lower in this market anyway, unless of course we get some type of good news out of the Brexit negotiation between Teresa May and the European Union. Ultimately, it’s very difficult to imagine that scenario, and the Europeans don’t look very likely to be willing to deal at this point in time.

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