GBP/JPY Price Forecast – British Pound Powers Higher

The British pound has rallied a bit during the course of the trading session on Friday to break much higher against the Japanese yen. We have been pressuring a lot of the resistance for a while now, so it certainly looks as if this is something that has been in the works. The candlestick extended rather drastically, suggesting that we have further to go, perhaps reaching towards the ¥145 level above, as it is the next major resistance barrier on longer-term charts and of course a large, round, psychologically significant figure.

GBP/JPY Video 01.02.21

Clearly this is a market that favors the upside in general as the British pound is trying to get back towards historic norms, which is probably closer to the ¥150 level. This does not necessarily need to happen overnight, and I do think that eventually we are looking at a scenario where we get there due to the fact that there is so much optimism out there now that the vaccine has been rolled out. Furthermore, the fact that the Bank of England has walked back recent talk about possible negative interest rates does good things for the British pound as well, so I believe that this continues to be a “buy on the dips” type of scenario.

I do believe that eventually we will get a pullback, but that should be thought of as value that is being offered, and I will be adding to my position on these dips. I do believe that eventually we break through the ¥145 level as well, opening up the door for the much more significant longer-term trade. I have no interest in shorting this pair anytime soon.

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