GBP/JPY Price Forecast – British pound recover some of the losses

The British pound rallied a bit during the trading session on Wednesday, wiping out some of the losses from the Tuesday selloff. That being the case, it looks very likely that the market continues to jump around in this area, at the downtrend line which was the top of the down trending channel. Beyond that, we have the ¥145 level which of course will attract a lot of attention, and then the 200 day EMA underneath turning to the upside.

GBP/JPY  Video 14.03.19

Looking at this chart, the ¥150 level above is very important, so it’s going to be difficult to break above there. However, based upon the bullish flag that I have drawn on the chart, we should then go looking towards the ¥145 level given enough time, but it is going to take a certain amount of momentum building to get to that level. I think short-term pullbacks continue to offer buying opportunities and although we are waiting for a UK parliament vote as to whether or not to take a “no deal Brexit”, the reality is that the charts tell us that the buyers are becoming more and more aggressive over the longer-term.

I think the “floor” at the moment is the ¥143 level, an area that will continue to be important, so if we were to break down below there we could drop another 300 pips rather quickly, reaching down towards the ¥140 level. That’s not my base case scenario, but it is an alternate one that I have in the back of my mind.

Please let us know what you think in the comments below