GBP/JPY Price Forecast – British pound trying to break out

The British pound initially dipped a bit during the trading session on Wednesday, but then turned around to try to break out to the upside. The question now is whether or not we continue to do so?
Christopher Lewis
GBP/JPY daily chart, June 13, 2019

The British pound pulled back a bit during the trading session before rallying above the ¥138 level. At this point, it looks like we are trying to break out and we could go looking towards the ¥139 level, perhaps even the ¥140 level. That being said, I don’t necessarily believe that this is an opportunity to start going long, rather I would be much more comfortable shorting closer to that ¥140 level, assuming we can even make it that high. Remember, this pair not only has to worry about global growth, but also the Brexit which those two things together will continue to weigh upon this market.

GBP/JPY  Video 13.06.19

To the downside, now that we have broken below the 61.8% Fibonacci retracement level, I suggest that we could go to the ¥135 level over the longer-term. A relief rally makes sense though, because we are oversold by quite a few different metrics that I use. Look at the short term pop higher as a gift that you can take advantage of to short this market from a higher level. That of course would be a very good opportunity to take advantage of what has been such a huge market move over the last several weeks. Although the last couple of weeks look a little healthier, nothing has changed from the bigger picture, so I suspect this is going to be a relief rally more than anything else and therefore don’t buy into it both literally and figuratively at this point.

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