GBP/JPY Price Forecast – Continues to Press Major Figure on Optimism

The British pound initially fell during trading on Wednesday, reaching towards the middle of the previous session before jumping back towards the ¥140 level. The ¥140 level of course is a large, round, psychologically significant figure and will attract a certain amount of attention. There has been a lot of resistance above there and it certainly looks as if we are trying to break through it as I record this. Nonetheless, this comes down to Brexit more than anything else so it will be interesting to see whether or not the market can actually continue this type of momentum. One certainly would have to have the impression that this is like a “beach ball being held underwater”, meaning that once it finally breaks the surface it will probably shoot straight up in the air.

GBP/JPY Video 17.12.20

I believe that we are currently seeing big money flow trying to break stops in that area, and quite frankly even though it has failed multiple times, one has to wonder how long the sellers can stay there? Remember, candlestick charts are simply a reflection of the psychology of the markets, and if you were shorting the market at ¥140 previously, the fact that the market keeps challenging it certainly does nothing for your confidence. Ultimately, this will come down to Brexit and I suspect that this pair will go looking towards the ¥142.50 level sooner rather than later. This does not mean that I would necessarily jump in with both feet at the highs, just that pullbacks will more than likely continue to be buying opportunities going forward.

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