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GBP/JPY Price Forecast – British pound recovers

By:
Christopher Lewis
Updated: Sep 25, 2018, 04:43 UTC

The British pound recovered during the day on Monday against the Japanese yen, breaking above the ¥148 level. However, I think there is a big fight ahead of ourselves to reach the highs again. I suspect that until there is some type of clarity and the situation involving the Brexit, it’s difficult to hang onto gains for the longer-term.

GBP/JPY daily chart, September 25, 2018

This pair is not only sensitive to the Brexit, but it’s also going to be sensitive to other situations such as the geopolitical concerns around the world. After all, we have a situation where the Chinese and the Americans are involved in a trade tariff war, and it’s possible that it’s only going to get worse. If that’s the case, that should drive down the overall global markets, thereby driving down risk assets, which this pair is highly sensitive to. Compound that with the potential of headlines coming from the Brexit, and it’s no big surprise that the market would struggle to hang onto gains in this environment. I think that the market will probably try to revisit the ¥147.35 level, but I wouldn’t put a lot of money based on that opinion. But frankly, I think this is a market that can turnaround on you at any given moment due to headlines coming out of the United Kingdom or Europe, and of course United States and China. In other words, this is a very dangerous place to put your money right now. If you’re correct in your trading analysis, it’s great, but unfortunately that can change at the drop of a hat.

I recognize that the market will eventually go looking towards the ¥150 level, of course it’s going to be a very difficult road to get there. At this point, I would keep my position size very small and only add once things are proven to be correct in your analysis.

GBP/JPY  Video 25.09.18

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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