GBP/JPY Price Forecast – British pound rallies against Japanese yen in “risk on” Tuesday session

The British pound rallied against the Japanese yen during trading on Tuesday, as the Asians and Europeans went completely “risk on.” This of course helps this pair as it is so wrist sensitive in general, driving the value of the Japanese yen down overall. The British pound of course has the overhang of the Brexit, so that makes this pair more volatile than usual, which is truly saying something. I think at this point, there is enough order flow just above that it could cause some issues for the buyers, so therefore I think that we are probably going to see some type of pullback. Whether the pullback is one that sticks or if it simply a bit of momentum building remains to be seen, but right now I would be a bit cautious about buying this pair.

Quite frankly, if you want to short the Japanese yen, you may want to do it with the New Zealand dollar, the Australian dollar, or perhaps even the Canadian dollar as oil seems to be going fairly well. The problem with this pair of course is that there could be a headline that comes out suddenly about the Brexit that sends sellers back into the market, regardless of the risk appetite in general. This pair is highly volatile, so regardless of what you do with it, I would promote keeping small positions in this type of environment.

GBP/JPY  Video 22.08.18