GBP/JPY Price Forecast – British Pound Pulls Back To Fill Gap

The British pound broke down a bit during the trading session on Tuesday, filling the gap again that happened after the election results were released. At this point, the market is likely to see buyers come in rather soon, and especially near the ¥142.50 level, which has been massive support recently. Ultimately, this is a market that should continue to see a move to the upside. To the downside, even if we were to break down below there it’s likely that the ¥140 level will offer a bit of a “floor.”

GBP/JPY  Video 18.12.19

Looking at the currency pair, it is going to be moving with the latest headlines involving negotiations with the EU, and currently it seems as if Boris Johnson is willing to step away from the EU without some type of deal if necessary, as the revelation that he was going to make it illegal to ask for an extension to the process. This is a scenario of getting things done, and unfortunately a lot of bankers still believe that anything involving the separation is going to be negative, but at the end of the day the economic numbers are not showing that. Yes, there has been a negative effect on the whole, but the same thing can be said for the European Union which is hanging out by a thread as far as staying out of a recession is concerned. Longer-term, when you look at the British pound it is historically cheap, so value hunters should come back into the fray over the next day or two. I have no interest in shorting this pair, I will be waiting for a supportive or impulsive bullish candle to start buying again on the daily chart.

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