GBP/JPY Price Forecast – British Pound Sitting Just Below Major Level

The British pound went back and forth on Tuesday as we continue to dance just below the ¥140 level. This is an area that should continue to attract a certain amount of attention, and therefore it is only a matter of time before we have to make some type of decision. Quite frankly, there are a lot of concerns out there about the lock down in the United Kingdom, but it is obvious that we have not exactly broken apart at this point, so it does suggest that perhaps there is more resiliency here than meets the eye. The 50 day EMA underneath should offer support, and of course this is a market that has been trending higher over the longer term anyway.

GBP/JPY Video 06.01.2021

Keep in mind that this pair is highly sensitive to the risk appetite around the world, so that could be a push to the upside given enough time as well. That being said, the market is likely to see a lot of volatility, but overall, I do believe that it is only a matter of time before we go back towards the highs unless of course we get some major “risk off scenario” that we end up in. Pullbacks should be bought in general, as we have seen a tremendous amount of resiliency through the last several months. To the upside, the ¥142.50 level would be a target, eventually looking towards the ¥145 level. In general, this is a market that I do not see any reason to start shorting anytime soon, because quite frankly that has been a losing trade for a while.

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