GBP/JPY Price Forecast – British Pound Gives up Gains at Same Place

The British pound initially gapped lower, turned around to explode to the upside, but then failed again at the ¥145 level. This is an area that of course is important on a longer-term chart and from a psychological standpoint, so it is most definitely worth watching. With that in mind, I believe that if we can finally break above the ¥145 level traders will jump into the market and pile into the trade. Until then, I think that we probably see a lot of “buy on the dips” scenarios.

GBP/JPY Video 09.02.21

Underneath, I see the area near ¥142.75 as a potential support level that people will be paying close attention to. This is an area where we have seen an impulsive move towards this ¥145 region, so I think there is a certain amount of interest in any type of pullback the goes down to that area. If we were to break down below there, then I believe the next support level is probably closer to the ¥141.75 level, or even the 50 day EMA which sits just below there.

On a breakout to the upside, I believe that opens up the door to the ¥147.50 level based upon historical charts, and then of course the large, round, psychologically important ¥150 level that would attract a lot of headlines news. All things being equal, this is a market that is in an uptrend so I do not necessarily want to short it, but I do recognize that perhaps we are a little bit overdone in the meantime, it may need to pullback in order to build up enough momentum to turn things around and continue going to the upside for the longer-term move.

For a look at all of today’s economic events, check out our economic calendar.