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GBP/JPY Price Forecast – British Pound Shows Support Against Yen

The British pound initially fell during the trading session on Wednesday but have found enough support to turn around and show signs of strength. That being said, the market looks very likely to continue going higher after we have shaken out a lot of the “weak hands.”
Christopher Lewis
USD/JPY

The British pound fell a bit during the trading session on Wednesday, reaching down towards the 50 day EMA before bouncing significantly. The hammer that is trying to form for the trading session is a very good sign, and it’s very likely that the market should continue to go higher, perhaps reaching towards the ¥148 level. The bullish flag has offered plenty of support again, and now it looks as if we are ready to go higher. This is a market that has a lot of noise involved in it, but quite frankly it is a risk averse or risk appetite driven market.

GBP/JPY  Video 09.01.20

At this point, it shows that even though there has been a lot of negative headlines out there, traders are still looking to take advantage of the upward momentum, and at this point it almost looks as if we are forming a bit of a “falling wedge”, which is a bullish sign once we break out. The fact that we have bounced so hard during the trading session it tells me that there is a significant amount of support built into the bullish flag that I have marked on the chart. The ¥140 level underneath is still going to be an area that attracts a lot of attention not only because of the bullish flag but also because of the market is looking for a return as they get away from the Japanese yen. If we were to break down below the ¥139 level, then it suggests that perhaps we have more trouble ahead.

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