GBP/JPY Price Forecast – British pound pulls back on WednesdayThe British pound pulled back a bit on Wednesday against the Japanese yen, but at this point there is still a lot of impulsive buying underneath. This should continue to provide a little bit of support, but keep in mind that this pair will be very noisy due to the Brexit negotiations.
The British pound pulled back a little bit during the trading session on Wednesday, but at the end of the day you have to keep in mind it’s probably more about the Brexit than anything else. Beyond that though, there are concerns about global trade and that will greatly influence what happens next with the pair, as it is highly sensitive to global trade issues, and right now that means noise between the United States and China. That should continue, so that will of course continue to be a problem with this market. However, if we get good news about the Brexit, that will overwrite everything in this pair and send it straight up.
I believe that there is plenty of support near the ¥144 level, and probably even lower than that. Because of this, I look at the short-term pullbacks as potential buying opportunities and position myself accordingly. Ultimately, the market should continue to show itself as one that is very volatile and sensitive to the headlines, but I do think that eventually we will break out to the upside. The ¥142.75 level is now what I’m considering the “floor” in the market, so until then I’m not interested in shorting this pair. Obviously, there are going to be rough days ahead but I think eventually we will find some type of clarity, perhaps in the next month or two when we get certainty about the Brexit. Be careful of headlines.