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GBP/JPY Price Forecast – British pound pulls back slightly

The British pound pulled back slightly during the trading session on Thursday, as the market had reached the crucial ¥135 level. With that in mind it makes sense that we will see a significant pullback from this area at the first hint of trouble.
Christopher Lewis
GBP/JPY daily chart, September 20, 2019

The British pound has pulled back slightly during the trading session on Thursday, as the ¥135 level has offered a certain amount of resistance. There is the psychological aspect of that number, and of course the 38.2% Fibonacci retracement level sitting right there that will cause quite a bit of an issue. There is a significant amount of noise above all the way to the 200 day EMA, which sits at the ¥137.50 level.

GBP/JPY  Video 20.09.19

The market move recently has been a bit parabolic so it would make sense that we pull back from here, reaching down towards the ¥132 level, perhaps even the ¥130 level. Keep in mind that the Brexit situation continues to cause a lot of issues for the British pound as there are so many unknown variables still to this day that it is difficult to imagine a scenario that the market suddenly takes off to the upside. At this point, the market participants will continue to show quite a bit of fear, and the fact that we have been a bit parabolic recently suggest also that we do need to pull back a bit. It’s almost as if the market is standing on a legend just needs a little bit of a “push” to make its move.

One of the big influences of course will be the US/China trade situation which continues to be a moving target as well. One would have to think that eventually it’s only a matter of time before some type of negative headline kicks this thing over.

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