GBP/JPY Price Forecast – British pound remains resilient

The British pound initially pulled back against the Japanese yen to kick off the Wednesday session, but found enough support near the ¥148.40 level to turn around and rally again. As I record this, we are banging up against the ¥149 level, and I think that eventually we will see the buyers prevail, sending this pair towards the ¥150 level. There will be the usual volatility that we see in this market, and of course it will follow the overall attitude of the trade negotiations between the United States and China, and of course the ever present Brexit negotiations. Headlines will drive the markets occasionally, but overall it is relatively clear to see that the proclivity of the market is to go higher, not lower.

It is in this situation that I look at short-term pullbacks as buying opportunities, although there is a certain amount of risk involved in trading this market currently. I anticipate that the ¥148 level should be supportive, so I would be a bit surprised if we broke down below there, save for any major headline coming out. Recently, we have seen the same thing repeated itself:  negative headlines coming out of the Brexit situation, only to see the buyers jump back in and take advantage of perceived value. Ultimately, it leads us into a “by on the dips” scenario that we can take advantage of. The market certainly has been shaken occasionally, but overall I do think that once we break above the ¥149 level, the market will prevail to the upside and eventually clear the ¥150 level as the British pound is historically cheap.

GBP/JPY  Video 27.09.18