GBP/JPY Price Forecast – British pound runs into resistance against Yen

The British pound has initially tried to rally during the trading session on Friday but ran into significant resistance near the ¥132.50 level. That’s an area that I have been talking about for some time now, as it is the scene of significant consolidation and choppiness. Beyond that, we also have the 61.8% Fibonacci retracement level offering resistance, and of course the 50 day EMA. With all of that being the case, and the fact that we are going to see votes about the Brexit coming out of the United Kingdom, we are setting up for a potential selling opportunity.

GBP/JPY  Video 09.09.19

If we do not get that move, then it’s very likely that the ¥135 level will be even more resistive. If we get that move, it’s even more likely to offer selling pressure and a nice opportunity to short this market as it is a longer-term trend and the British pound represents uncertainty. Beyond that, this is a market that is highly sensitive to risk appetite around the world so it’s not hard to imagine how something could come out that causes a lot of concern and fear.

With all of that being said it’s a simple matter of which direction do we break from the 50 day EMA and placing the sell order closer to the ¥135 level, or perhaps below the ¥131 level. If we do drop from here, we should eventually go looking towards the lows again. Obviously, the ¥130 level could cause some issues though.