GBP/JPY Price Forecast – British pound strengthens midweekThe British pound rallied significantly during the session on Wednesday, reaching towards the ¥149.25 level by the time the Americans jumped on board. This is a bit of a “risk on” move, and of course it appears that the Brexit is starting to look like less of a fear for investors, so therefore it makes sense that we would get this rally. However, we are getting close to the top of the recent consolidation.
As far as this pair is concerned, the ¥150 level is crucial. We are getting close to that level, so I think we might be a little bit of a stretch, but when you look at the chart you can’t help but notice that the massive selloff that we had seen recently has been all but recaptured. This is typical of the British pound as of late, sellers will come in based upon some type of headline and value hunters will come in and pick it back up. I think that continues to be the best way to trade this market, as it’s obvious that the United Kingdom is going to survive the Brexit at this point. We have recently seen Armageddon priced into the British pound, and it seems as if the cooler heads will prevail eventually. After all, the United Kingdom can always fall back on the WTO agreements, which both the UK and the EU are signers of. Ultimately, the world will go on and the United Kingdom will exist next year. It seems as if the currency market is finally coming to terms with that, so therefore I continue to be a buyer of the dips. Once we break above the ¥150 level, then I think the market can extend a rally to much higher levels.