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GBP/JPY Price Forecast – British pound testing major support

By:
Christopher Lewis
Updated: Dec 28, 2018, 18:35 GMT+00:00

The British pound has broken down during the trading session on Friday, slicing through major support, but has found buyers to let the market yet again. We are teetering on a major support level, so it’s very likely that we will get some type of significant move after New Year’s Day.

GBP/JPY daily chart, December 31, 2018

The British pound has broken below the ¥140 level during the day on Friday, as the level continues offer a lot of support. We have found this market to be relatively resilient in this area, so we may get a bit of a bounce. If we get a bounce from here, then it could offer an excellent selling opportunity above, especially near the ¥142.50 level. The alternate scenario of course is that we break down to a fresh, new low, and then the market could roll off down to the ¥138 level.

GBP/JPY  Video 31.12.18

We have been in a major descending channel for some time, and of course the 200 day EMA is starting to turn down just above the ¥145 level. This is of course one of the major indicators people use to determine trend, and it looks very much like the trend is negative. Because of this, I look for short-term rallies to sell as it gives me value in the Japanese yen, and it should be pointed that the USD/JPY pair has found the ¥110 level supportive and much the same way. I think the market is likely to see a lot of volatility, but I think it’s only a matter of time before we do break down. The British pound of course has to worry about the Brexit as well, so that will have a major influence on this market as there is a lot of uncertainty when it comes to the United Kingdom.

About the Author

Chris is a proprietary trader with more than 20 years of experience across various markets, including currencies, indices and commodities. As a senior analyst at FXEmpire since the website’s early days, he offers readers advanced market perspectives to navigate today’s financial landscape with confidence.

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