GBP/JPY Price Forecast – British Pound Pulls Back

The British pound initially tried to rally during the trading session on Tuesday but then gave back the gains to reach towards the ¥152.50 level. That is an area where we had recently seen a resistance level, so it should now be a support level. That being said, the market has gotten a little bit ahead of itself and therefore I think part of what we are seeing here is simple profit-taking.

GBP/JPY Video 07.04.21

The ¥150 level is a large, round, psychologically significant figure, and an area that I think will attract a lot of attention anyway. Furthermore, the 50 day EMA is starting to reach slightly above ¥148.50, an area that previously had been supported as well. That being said, the market is likely to continue to see buyers on these dips, but in the short term it certainly looks as if we should pull back slightly. Keep in mind that this pair is highly sensitive to risk appetite, so it is most certainly something worth paying attention to as the markets may have an influence to where we go next.

That being said, I still believe that the market is ready to go higher, and I have no interest in shorting this market anytime soon. The ¥145 level would be a “floor the market”, so if we were to break down below there then the market is likely to enter some type of downtrend. Ultimately, I do not think that happens, but I would of course have to pay close attention to a change in the overall attitude if we were to cross that line. At this point, it is a simple matter of waiting to find value that we can take advantage of.

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