GBP/JPY Price Forecast – British Pound Running Out of Steam

The British pound has rallied a bit during the trading session on Tuesday, spiking above the 147.50 level before pulling back again. This is a market that is getting a little bit overdone, but at this point I think it is obvious that it is a bullish market. This is a simple matter of running out of momentum. Ultimately, to the downside I believe that the ¥145 level underneath would be a significant support level, as it was a significant resistance level. Furthermore, it is a large, round, psychologically significant figure, and therefore think it will attract a lot of attention as well.

Ultimately, this is a market that is far too overdone so I think a pullback and a little bit of stability might be the best way going forward. The ¥150 level is the target longer-term, but I think it is going to take quite a bit of effort to get up there after expending so much in January to push higher. Furthermore, we had a little bit of a “blow off top” of sorts during the last couple of days.

I think all of this momentum is going to continue to be something that works against the parent now, as you figure that you probably will have trouble finding new buyers. This of course will be a temporary thing, and I think as we continue to go back and forth but overall, it is a longer-term uptrend that we are in. Keep in mind that this pair is highly sensitive to risk appetite, so that is something that should be paid attention to as well.