GBP/JPY Price Forecast – British Pound Pulled Back From Lofty Levels

The British pound has pulled back a bit during the course of the trading session on Wednesday as we have gotten a bit ahead of ourselves. At this point, it looks as if the market will be doing a little bit of consolidation, in order to work off some of the previous froth. Because of this, I think that we go sideways in the short term, but it does make a certain amount of sense considering that we have been going straight up in the air for a while. The ¥155 level underneath should be supportive, as it was previous resistance and therefore certain amount of “market memory” comes into the picture. With that being the case, I think we are more than likely going to see a pullback or sideways action in order to build up the necessary inertia to take out the ¥157.50 level, and then perhaps the ¥160 level.

GBP/JPY Video 28.10.21

If we were to break down below the ¥155 level, then it is possible that we could go looking towards the ¥152.50 level, an area that has been important as well. It is not until we break down below the ¥150 level that I would be bearish of this market, as it has been so strong. Keep in mind that this pair does tend to move right along with risk appetite, going higher when times are good, and lower when times are bad. The Japanese yen is considered to be a “safety currency”, and therefore it attracts a lot of attention when people are fearful. At this point, it looks like the “risk on trade” is the most viable one.

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