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GBP/JPY Price Forecast – British pound testing major support

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.
Christopher Lewis
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.

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