GBP/JPY Price Forecast – British Pound Struggles To Go Higher

The British pound rallied a bit initially during the trading session on Monday, but as you can see the market has turned around to give back most of those gains. Quite frankly, the market looks as if it is struggling to find some type of momentum to go forward now that the election is out of the way.
Christopher Lewis
GBP/JPY Price Forecast - British Pound Struggles To Go Higher

The British pound initially rallied against the Japanese yen during the trading session on Monday, but as you can see has failed to continue going forward. The market initially broke above the ¥146 level but found that area to be a bit too rich. The 100% Fibonacci retracement level is just above the ¥148.50 level, and that is a pretty significant barrier that will be difficult to get above. If we do, that opens up the door to the ¥150 level.

GBP/JPY  Video 17.12.19

Keep in mind that the market is more likely than not to go higher over the longer term, but the biggest concern now is going to be what happens next with Brexit. Underneath, the ¥140 level is a massive support level, and essentially what I would look at as a trend change if we were to break down below there. I suspect that we probably get a short-term pullback, but I look at that as potential value. Ultimately, this is a market that eventually breaks out and goes much higher, but we need to get more forward in the Brexit situation as now it’s likely that the United Kingdom is definitely leaving. Beyond that, there is another thing to think about in this case, and that’s going to be what the trade agreement is going to look like once we move forward. At this point, it’s likely that the British pound will continue to strengthen over the longer term, but after this massive surge, we need to pullback in order to build up more momentum.

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