GBP/JPY Price Forecast – British pound hugs ¥145

The British pound continues to dance around the ¥145 level in a relatively tight range, as we await the results of the Brexit negotiations between Teresa May and Parliament. I don’t know that the agreement is going to be signed, so I think that traders are starting to think about the Brexit in terms of no deal. If that’s going to be the case, I suspect that the British pound will sell off rather rapidly but will be more of a flush than anything else, meaning that I think it will recover much quicker than people think.

GBP/JPY  Video 28.11.18

When I look at the daily chart, you can make an argument for a bit of a bearish flag but there’s also a significant amount of support just below what would be the flag. So this point I think it continues to be very choppy and difficult but once we get that move lower, we could open the door to the ¥140 level. Alternately, we could rally from here but I think the downtrend line will continue to push the market lower, with the ¥148 region being said as significant supply, and then the ¥150 level above there of course offering a lot of psychological resistance. I think at this point, I would be much more comfortable fading rallies as they occur as there are far too many negative headlines out there waiting to knock the market around.