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GBP/JPY Price Forecast – British Pound Pulls Back Slightly

By:
Christopher Lewis
Published: Aug 25, 2021, 13:35 UTC

The British pound initially tried to rally during the trading session on Wednesday but struggled to break out above the highs of the Tuesday candlestick.

GBP/JPY Price Forecast – British Pound Pulls Back Slightly

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The GBP/JPY level quite often represents the overall risk appetite around the world, and while we did see a significant bounce over the last couple of days, we are starting to run out of momentum. This suggests that we are still continuing to see a lot of questions out there when it comes to whether or not we are going to continue to go higher, as there are a lot of questions when it comes to whether or not we are going to see growth around the world. If we do not see more of a “risk on” type of move, then it is very likely that we will see this pair fall.

GBP/JPY Video 26.08.21

If we break down below the lows from the trading session on Monday, then I think we go looking to test the bottom of the hammer from a couple of weeks back, which was the swing low. If we break down below there, then it is likely that we go looking towards the ¥147.50 level, and then perhaps even the ¥145 level. On the other hand, if we were to turn around a break above the ¥151.50 level, then it is likely that we could go looking towards the ¥152.50 level. That is an area that has been resistance and of course we have sold off quite drastically. Obviously, there should be a significant amount of supply in that general vicinity.

As things stand right now, when you look at the overall action since we broke above the ¥150 level the first time, it certainly looks as if we are struggling and forming a larger “topping pattern.” Because of this, I suspect that we could see quite a bit of negative pressure in the next few weeks.

For a look at all of today’s economic events, check out our economic calendar.

About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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