GBP/JPY Price Forecast – British pound rallies from support

The British pound got a bit of a boost during trading on New Year’s Eve, perhaps move due to a lack of liquidity, or possibly even short covering as traders closed out the books. I don’t think anything’s changed as far as the British pound is concerned, it’s just the time of year more than anything else. Quite frankly, there was no nudes that should have been bullish for the British pound, and of course the risk appetite of the market will have a lot to do with where we go next. I could see a potential bounce from here, but quite frankly I would be surprised to see the market break above the ¥142.50 level.

GBP/JPY  Video 02.01.19

The alternate scenario of course is that we break to a fresh, new low, then go looking towards the ¥138 level which I think we will do it eventually regardless. There are still a lot of concerns about the Brexit, and we are no closer to a resolution then we were two weeks ago. The market had been very negative for some time, so the fact that we are going sideways isn’t much of a surprise, simply because we have fallen so far in such a short amount of time. Ultimately, I look at rallies as a nice selling opportunity as we are decidedly in a downtrend. The down trending channel has been strong and resilient, so I don’t think anything is going to change.