GBP/JPY Price Forecast – British Pound Sluggish at Major Level

The British pound initially tried to rally during the trading session on Thursday but continues to see the ¥135 level as a major barrier to overcome. The fact that we are running out of steam here makes quite a bit of sense, because we had rallied so quickly and what would be a major “risk on” type of currency pair. Ultimately, the 50% Fibonacci retracement level is in the same region as well, so it should attract a lot of attention in and of itself. That being said, I like the idea of fading rallies as the markets clearly don’t have the momentum to break out quite yet. Furthermore, if the market breaks down below the lows of the previous session, that could add more fuel to the fire, perhaps opening up the move down to 132.50 where I see a lot of support.

GBP/JPY Video 17.04.20

Ultimately, it’s not until we break above the 50 day EMA that you could be a serious buyer of this market, as it is so sensitive to the various risks out there. The Japanese yen being a safety currency and the United Kingdom expected to extend the lockdown means that this pair should continue to go lower, especially considering that the 50% Fibonacci retracement level is here as well. Quite frankly, the market had gotten a bit parabolic so it’s not a huge surprise if we do fail a bit here. On the other hand, there is a lot of noise just below so it’s going to be a choppy move at best.