GBP/JPY Price Forecast – British pound running into resistance

The British pound initially tried to rally during the trading session on Thursday but gave back quite a bit of the gains. This could be simply because it was a “risk on move”, followed by realization that we still have the Brexit going on.
Christopher Lewis
GBP/JPY daily chart, June 21, 2019

The British pound initially tried to rally during the trading session on Thursday but gave back the gains to form a rather bearish looking candle stick. Because of this, it looks as if we are ready to realize that the Brexit is still going on, so therefore the British pound might be a bit of an outlier in the Forex world, meaning that it should not be gaining against the Japanese Yen overall. The 138 level above is massive resistance, so I don’t think we get above there. If we did, that opens the door to the 140 level, but that seems to be very unlikely.

GBP/JPY Video 21.06.19

The 135 level underneath is massive support, but also the psychologically important so we should be paying attention to it. With that in mind I believe that the market will test that level, and therefore it’s likely that selling rallies continues to work, as there is no reason to think that this market is going to go higher. In fact, we are well below the 61.8% Fibonacci retracement level which is an extraordinarily negative turn of events, and normally leads to wiping out the entire move. That should send this market down to the ¥131 level over the longer-term, but obviously it’s not going to be an immediate move, and obviously it is going to take some work to get down there. Nonetheless, I think that this is a market that is telling you that we will probably continue to sell.

Please let us know what you think in the comments below

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