GBP/JPY Price Forecast – British Pound Testing Same Area

The British pound has rallied a bit during the trading session on Wednesday, crashing into the ¥135 level. That is an area that will attract a lot of attention as it is a large, round, psychologically significant figure, it of course it is worth paying attention to as the market participants tend to pay attention to these longer-term big figures.

We are currently between the 50 day EMA and the 200 day EMA, so that makes quite a bit of sense that we would see noise. At this point, it is very possible that we will see a pullback towards the 50 day EMA but I think we will continue to see that level offer support as well. If we were to turn around a break down below the hammer from the previous session, that would of course be negative and could open up a move towards the ¥132 level underneath.

GBP/JPY Video 16.07.20

Ultimately, if we can get a daily close above the ¥135 level it is likely that we go looking towards the 200 day EMA above. That being said, this is a market that is extraordinarily volatile, and that is under the best of circumstances. At this point, it is likely that the noise will continue as we have so many questions about the global economy and of course the United Kingdom itself. We still have Brexit to deal with, despite the fact that nobody seems to be paying attention to it. At this point, a technical pullback makes quite a bit of sense, but I would not necessarily be expecting a major breakdown.

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