GBP/JPY Price Forecast – British Pound Testing 200 Day EMA

The British pound has rallied a bit during the course of the trading session on Wednesday to reach towards the 200 day EMA. The pair has been threatening some type of break out as of late, but there is obviously a lot of resistance in this general vicinity, so I think you are probably better off waiting to see whether or not we can finally clear this area on a daily close to get excited about going long. To the other side of the equation, we could very well pull back in head towards the ¥150 level again. This is an area that has been important more than once, so I do think that it is probably only a matter of time before we revisit it.

GBP/JPY Video 16.12.21

Keep in mind that we are at the end of the year, and it will not be a huge surprise to see one sudden jolt in either direction, and then a whole lot of nothingness between now and New Year’s Day. That being said, the market is likely to be noisy to say the least, so I think at this point in time it is likely to be a situation where liquidity becomes a major factor, perhaps making this pair one of the more dangerous ones to trade over the next couple of weeks.

Ultimately, this is a market that I think will move right along with risk appetite over the longer term as it does typically behave, and therefore I like the idea of bringing your position size down a bit in order to protect your account. The markets are likely to be noisy to say the least.

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