GBP/JPY Price Forecast – British pound halts on FridayThe British pound struggled to go higher during the trading session on Friday, as we have seen the market get a bit over stretch. We tested the 200 day EMA but then pulled back a bit, which one would expect.
The British pound went back and forth during the trading session on Thursday, showing signs of exhaustion at the 200 day EMA as one would expect. The bulk of algorithmic traders out there pay attention to the 200 day EMA, as it is a longer-term trend setting moving average. Now that we have ran into a bit of trouble there, it’s not a huge surprise if we pull back. I think quite frankly we could pull back as far as the red EMA on the chart and still remained somewhat bullish. Looking at the longer-term view of this pair, I think that this is all about the Brexit being delayed, perhaps nothing else.
GBP/JPY Video 28.01.19
This pair is sensitive to global risk appetite to keep that in mind. Because of this, I think that the market participants will continue to see a lot of volatility, but quite frankly it’s only a matter time before headline to push this market back and forth. If headlines come out and spit the market, the moves will be quite violent. Because of this you should keep your position size small and be weary of putting way too much money into this market. You should also pay attention to the fact that this pair is highly sensitive to global risk, which of course is being influenced by the US/China trade relations, global protests, and of course economic numbers out of places like China that have been slowing down. Above the 200 day EMA, I think the ¥145 level will also be an area of great bearish pressure. Because of this my base scenario is for a short-term pullback.