GBP/JPY Price Forecast – British pound initially tries to rally but gives up gains

The British pound initially tried to rally during the trading session on Friday, and even broke above the ¥138 level. However, we have given back all of the gains and now have started to form a bit of a bearish candlestick.
Christopher Lewis
GBP/JPY daily chart, June 10, 2019

As you know, this pair is highly sensitive to risk appetite, as we broke above the ¥138 level things look rather good. However, we have turned right back and forth and it now looks very likely to roll over and reach towards ¥136.50 based upon the fact that the Brexit isn’t going to help the situation, and of course we haven’t seen any significant progress in that situation. With that being the case, it makes sense that the British pound continues to offer selling opportunities on rallies, especially against a safety currency such as the Japanese yen over the US dollar.

GBP/JPY  Video 10.06.19

As it looks like there is a bit of a global slowdown as well, that also works against the value of this pair, as it is highly sensitive to global growth and global risk appetite. At this point, it looks like we will continue to struggle to break above the ¥138 level, but even if we did I think it’s even more resistive at the ¥140 level, so I have no interest in trying to buy this pair right now, rather I would look for signs of exhaustion that I can take advantage of, and therefore remain on one side of this trade. It’s not until we get a daily close above the ¥140 level that I would be interested in buying for any significant amount of time. To the downside, I think that now that we are below the 61.8% Fibonacci retracement level, it’s very likely that we could go down to the 100% Fibonacci retracement level.

Please let us know what you think in the comments below

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