GBP/JPY Price Forecast – British pound soars during Tuesday session

The British pound took off to the upside during the Tuesday session against the Japanese yen as more of a “risk on” flavor came back into the marketplace. However, as the Americans have stepped on board, it looks as if we may be a little overstretched as we are running into some recent selling pressure around the ¥148 level.
GBP/JPY daily chart, October 17, 2018

The British pound broke higher during trading in both Asia and Europe during the Tuesday session. However, as the Americans are starting to come to work it looks as if the ¥148 level may be causing a bit of exhaustion as we may have gotten a bit ahead of ourselves. Ultimately, this is a market that seems to have a lot of headline risk right now, due to the Brexit and of course the global trade situation. Overall, I believe that the pair is likely to pull back a bit from here, only to find buyers again. It looks as if we are trying to continue the overall consolidation between ¥147 on the bottom and ¥150 on the top.

Headlines coming out of the Brexit will of course continue to be an issue, and as we get closer to the end game, it’s likely that the market participants will be very skittish about hanging onto trades in general. It is because of this that I prefer to trade closer to the outer ranges of the 300 pips range, thereby making me look at this as an opportunity at lower levels, not necessarily here. I do believe that eventually the British pound may try to break above the ¥150 level and continue the overall uptrend, but it is most certainly going to take some time. Expect volatility regardless what happens next and keep your position size relatively small.

GBP/JPY  Video 17.10.18

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