GBP/JPY Price Forecast – British pound looking for support

The British pound has rallied slightly to kick off the trading week against the Japanese yen, as we are currently testing the 50 day EMA. This is a major indicator that attracts a lot of attention, so the fact that we bounced a bit to kick off the week probably isn’t a huge surprise. All of that being said, we are probably due for some type of balance after the selloff, but keep in mind that we had sold off from the crucial ¥135 level.

GBP/JPY  Video 01.10.19

The ¥135 level also features the 38.2% Fibonacci retracement level, which of course will attract a lot of attention. It is because of this that even if we do rally from here I suspect there will be a lot of trouble found in that region. Also, let us not forget that the bra exit situation still is murky and noisy to say the least, so it makes sense that we continue to see a lot of mistrust of the British pound. With all of the political noise coming out of London, it’s going to be difficult to own this market regardless.

Looking at this chart, if we were to break down below the ¥132 level, then it will send this market down to the ¥130 level. That is my ultimate target, but I also recognize that we probably have the headlines to throw this market around and therefore you will need to be very cautious about the amount of position size that you use.

Please let us know what you think in the comments below