GBP/JPY Price Forecast – British Pound Tossed AroundThe British pound has been all over the place as the Monetary Policy Committee voted to keep interest rates the same during the Thursday session, but it should be noted that there were two members that voted to cut rates. This was a bit of a shock.
The British pound initially broke down against the Japanese yen during trading on Thursday but then recovered quite nicely as people seem to have suddenly remembered that it takes a majority to cut interest rates, not to dissenting votes. That being said, the real concern about the British pound right now isn’t so much interest rates, but it’s Brexit. Brexit continues to be the only thing that people care about so as long as that’s the case, the fact that it has been a bit more conciliatory lately suggests that the British pound is going to continue to get a bid.
GBP/JPY Video 08.11.19
From a technical analysis standpoint, we are forming a major bullish pennant. That potential bullish sign is something that people should be paying attention to after the initial surge higher. Quite frankly, there’s nothing on this chart that says you should be shorting this pair, and it’s more than likely that the algorithms had gotten a hold of the market for a short time after that announcement. Now that the humans are back in control it’s very unlikely that they are willing to sell the British pound and as I record this video, we are back at the ¥140 level as a fulcrum for price.
Ultimately, this market will break out to the upside given enough time, but it needs some type of positive catalyst to make it happen. The 200 day EMA underneath should continue to offer support, but based upon the pole on the pennant, we could be looking at a move towards the ¥148 level, possibly even ¥150.
Please let us know what you think in the comments below