GBP/JPY Price Forecast – British Pound Goes Back and Forth

The British pound has been all over the place during the trading session on Thursday, as we continue to see a lot of noise in general. This pair of course is very sensitive to risk appetite, so I think at this point in time it makes sense that we will be essentially frozen. The ¥135 level underneath will probably have supported going forward, just as we have seen quite a bit of support over the last couple of weeks. To the upside, the 138 and level continues offer resistance, and of course we have the 50 day and the 200 day EMA indicators right in the middle. The shape of the candlestick is neutral, and that is probably the best representation of the market, because it simply has no idea what to do with itself.

GBP/JPY Video 06.11.20

The overall attitude of the market is one that is patiently waiting for US election results in the Senate, and of course everything involving Brexit. It is hard to believe that the British pound is suddenly going to be extraordinarily bullish overall, as the United Kingdom decided to lock itself down again. That is a great way to destroy your own economy, something that the European seem to be hoping to do between both Brexit and the lockdowns on the island and the continent. Self-destruction is not a good look, and with all of the risk out there right now, I would actually favor the Japanese yen. However, it is obvious that we are levitating in this area so there is no need to go aggressively short anytime soon. In other words, I think we simply bounce back and forth over the next couple of sessions.

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