GBP/JPY Price Forecast – British Pound Still Under Pressure

The British pound has initially tried to rally during the trading session on Wednesday but gave back the gains after we crossed above the psychologically important ¥150 level. This is an area that I believe will continue to be important, but I will admit that the most recent price action has not been overly impressive. While anticipating a pullback after a couple of moves higher is not a huge stretch of the imagination, the reality is that we have seen attempts to rally this market for days in a row, all of which have been beaten back rather severely.

GBP/JPY Video 15.04.21

I do not necessarily think that we are going to see some type of massive meltdown, but we are clearly not ready to take off to the upside. If we break down below the 50 day EMA, then we could see this pair drop down to the ¥145 level. While that may sound a bit drastic, the reality is that it would not be that out of the question, considering just how parabolic the pair had gotten. It would represent a nice pullback but not necessarily some type of trend change. In that scenario, I think a lot of longer-term traders would be very interested in this pair at the ¥145 level.

On the other hand, we could break above the highs of the last several sessions, opening up the gateway to the ¥152.50 level. From a longer-term perspective, this makes more sense, but it is worth noting that the momentum has certainly slowed in this pair, which is quite often what you see right before some type of corrective phase.

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