GBP/JPY Price Forecast – British Pound Hangs on to Major Figure

The British pound initially fell during the trading session on Friday, slicing through the ¥135 level. However, we turned right back around to recover and form a bit of a bullish looking candlestick, or at least a less bad looking candlestick. Above current levels though, the 50 and the 200 day EMA sits at roughly ¥136.75. I think that area continues to cause a significant amount of resistance but given enough time we should see exhaustion in that general vicinity and a return to this area, unless of course some major differences in the market produce themselves next week.

GBP/JPY Video 02.11.20

The breaking of the bottom of the candlestick could send this market down to the ¥133 level, as it was previous support. However, if we were to break above the ¥138 level, then it would send a market towards the ¥140 level. In the meantime, I think we are simply going to bounce around between the moving averages and the ¥135 level, as we await some type of announcement when it comes to Brexit. Brexit is the gift that keeps on giving, when it comes to wiping out trading accounts, so be cautious about trading this pair.

You should also keep in mind the beyond the Brexit talks we have the historical correlation between this pair and risk, and most certainly risk is out there that could come into play and send this market much lower, at least if the typical dynamic reaction is followed. Nonetheless, we are going to need to be very cautious in this range that we are trading in right now.

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