GBP/JPY Price Forecast – British pound rallied slightly against Japanese yen

The British pound initially pulled back a bit during the trading session on Friday, but then rally to reach the bottom of the descending channel that we had been in for quite some time. The question now is whether or not this can handle the pressure to form enough of a barrier to keep the market down. Looking at the British pound against other currencies, it isn’t exactly flying high so it wouldn’t surprise me at all to see this market roll over. I believe at this point the ¥140 level is the “ceiling”, but obviously we are a long way away from there. As I write this, we are currently trading around the ¥37 level. If we stay in this area at the daily close, it’s likely we will continue to go lower. The recent washout of this pair during the flash crash would have done a lot of technical destruction, and I think that something that should be paid attention to.

GBP/JPY  Video 07.01.19

Looking at the global situation, it’s obvious that the risk appetite has taken a significant pummeling lately. I think that will continue to be the case, so even if we do rally from here, I’ll be looking to short this market at higher levels. It’s not until we break above the ¥140 level that I am comfortable going long in this pair, beyond that we would need to see some type of good news coming out of the Brexit.