GBP/JPY Price Forecast – British Pound Takes a Deep Dive

The British pound fell hard against the Japanese yen during the trading session on Tuesday, as traders came back from the Labor Day holiday in New York. Beyond that, there has been a bit of a “risk off” type of fuel to the marketplace, so it does make quite a bit of sense that we would continue to see more Japanese yen buying. The question now is whether or not we can break down below the 50 day EMA, which is currently sitting at the ¥138.25 level, and flattening out a bit.

GBP/JPY Video 09.09.20

Looking at the candlestick, it is rather rough looking, but it should be noted that there is significant support underneath. To the upside, the market will obviously be paying attention to the ¥140 level, an area that is a large, round, psychologically significant figure. To the downside, I anticipate that there should be plenty of support near the ¥136 level, and of course even before we get there, the 200 day EMA. The question now comes down to whether or not we are going to have risk appetite returned to the market anytime soon.

The British pound itself is struggling to bit due to the fact that we are suddenly paying attention to Brexit again, but one would have to think it is only a matter of time before that disappears as it has multiple times. Comments over the weekend had traders a bit concerned as the UK may leave without a deal, but you know the story behind that – we have been hearing that for three years.

For a look at all of today’s economic events, check out our economic calendar.