GBP/JPY Price Forecast – British Pound Looking Exhausted

The British pound has gone back and forth against the Japanese yen at the ¥142.50 level yet again. Ultimately, this is a market that looks a little bit overextended and a pullback would make quite a bit of sense. We could drop 100 pips and find plenty of support to only turn around and continue the overall uptrend. I believe that we are trading between the ¥140 level on the bottom, and the ¥145 level on the top. All things being equal, this is a market that I think does try to get to the ¥145 level, but we have gotten a little overextended.

GBP/JPY Video 04.02.21

The last couple of candlestick certainly look as if we are running out of momentum, so I believe that a pullback is more likely than not. Furthermore, the British pound looks as if it is struggling against the US dollar slightly, and therefore I think that what we are looking at here is a pullback that offers value that people will be interested in later. If we were to break down below the ¥140 level, then that could change quite a few things. In general, this is a market that I think will be very noisy as it is typically very sensitive to risk appetite, and of course we have to worry about the overall markets as they have been quite skittish as of late.

The United Kingdom continues to see a lot of concern when it comes to the lock down and the coronavirus situation, so that has its influence with the British pound overall as well. At this point, I think we are looking at a lot of volatility just waiting to happen but the last couple of days looks as if the market is trying to figure out where to go next.

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