GBP/JPY Price Forecast – British Pound Trying to Recapture Momentum

The British pound has initially plunged against the Japanese yen during the trading session on Friday, but then turned around to show signs of life to recapture the ¥150 level. This is a market that has been very noisy as of late, and of course is driven almost entirely by risk appetite. In other words, this is a great barometer as to how the world is “feeling” about risk at the moment, so if you are not trading this market, at the very least is not a bad idea to keep an eye on it.

GBP/JPY Video 04.10.21

If the market were to break down below the ¥149 level, then it is possible that the market would fall apart and go much lower, perhaps looking towards the ¥145 level. To the upside, if we were to turn around and find signs of life, then it is not until we break above the ¥153 level that I would be convinced. All things been equal, I think the best thing that you can look for in this market is a lot of choppy behavior, as there is so much uncertainty out there.

Nonetheless, that uncertainty typically will cause fear, which typically will send this market lower. That being said, the market is likely to continue to see extreme amounts of volatility, so you should be cautious about your position size, nonetheless. After all, in this type of volatility you can lose money rather rapidly and drastically. With this, you need to be very cautious, but if we do finally get that break down below the ¥149 level, the market really starts to pick up and I would get big with my position.

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