GBP/JPY Price Forecast – British pound stable all things considered

The British pound pulled back just a bit during the day on Monday but considering that Donald Trump and the Chinese are chirping at each other through twitter again, it’s quite impressive. The ¥145 level has offered support, as it is a large, round, psychologically significant figure. Breaking down through that level opens up the possibility of a move down to the ¥144 level, which of course is an area where we’ve seen buyers at previously. Slicing through that level brings a lot more trouble into the marketplace.

GBP/JPY  Video 07.05.19

The alternate scenario is that we bounce from the ¥145 level, something that we are trying to do already, and go looking towards the ¥147 level which has seen a bit of selling in the past. Ultimately though, we need to see some type of negotiated settlement between the United Kingdom and the European Union in order for the British pound continue to grind higher against most currencies, and of course the Japanese yen would be any different.

With that in mind we need to be very cautious about our trade positions, and more importantly are trade sizes. This pair does tend to be very volatile under most circumstances and will be extraordinarily so during these days of financial fear, the Brexit, and highly overextended equities markets. That being said, that doesn’t necessarily mean that we need to break down though, so please keep that in mind.

Please let us know what you think in the comments below