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GBP/JPY Price Forecast – British pound rallies again against yen

By:
Christopher Lewis
Updated: May 1, 2019, 16:24 UTC

The British pound rallied again during the trading session on Wednesday against the Japanese yen, as we continue to see resiliency coming out of Sterling. However, we are getting close to some significant resistance just above.

GBP/JPY daily chart, May 02, 2019

The British pound rallied a bit during the trading session on Wednesday, reaching towards the ¥145.55 level. However, there is a downtrend line just above that could cause serious issues. If that’s going to be the case, then look for signs of exhaustion that you can start selling. However, if we can break above the ¥147 level then we will have smashed through this potential downtrend line. When I look at this chart, it seems as if we are trying to form a descending triangle, which is quite interesting considering that we had previously for the bullish flag. In other words, this is a market that is full of confusion.

GBP/JPY  Video 02.05.19

When you think about the dynamics of the GBP/JPY pair, should be a huge surprise? After all, it is highly sensitive to global risk, and then by extension is going to worry about a lot of different things at once. There are of course is the global trade situation which has people going back and forth as to what the outlook looks like for several economies around the world. There is the obvious Brexit issues out there, and part of the reason that we may have seen this market rally is due to the hope of a second referendum in the United Kingdom. However, I’m a firm believer that if that happened it would cost so much social unrest, that the British pound will probably sell off then as well. Ultimately, this is a pair that looks ready to roll over, but hasn’t quite shown signs of exhaustion yet.

Please let us know what you think in the comments below

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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