GBP/JPY Price Forecast – British Pound Tests 50 Day EMA Against Yen

The British pound fell initially on Tuesday to reach down towards the 50 day EMA yet again. This is an area that has been crucial for support over the last couple of weeks, and it does look like it is starting to try to come into play. The ¥135 level continues to be crucial for the market, and therefore I think that we will be paying close attention to it. To the upside, I see the 200 day EMA offering a lot of resistance, so if we were to break above that indicator, painted black on the chart, then it opens up the possibility of a move towards the ¥140 level.

GBP/JPY Video 15.07.20

To the downside, if we break down below the 50 day EMA it is likely that we go looking towards the ¥132 level, an area that has been supportive recently. This move was attempted early during the trading session on Tuesday, but so far has been rejected. However, if we were to break down through the 50 day EMA, it would be a negative sign because it would be the market trying to do so yet again, after being repudiated.

Keep in mind that this pair is sensitive to risk appetite, so pay attention to what stock markets and overall risk assets are doing. If it seems that the market is in a “risk on” type of mood, then it makes a significant amount of sense that this market would rally. However, as we are in earnings season in the United States, bad news could be fast and furious. Furthermore, we have a lot of concerns when it comes to the coronavirus. All of that, and we have not even discussed Brexit yet.

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