GBP/JPY Price Forecast – Pound Bounces From ¥155

The British pound has bounced just a bit during the trading session against the Japanese yen on Wednesday, as the ¥155 level has offered a significant amount of support. The ¥155 level of course is a large, round, psychologically significant figure, and it is also an area where we had previously seen a lot of resistance. In other words, a certain amount of “market memory” could come into the picture there, and so far, it looks as if that is what we are seeing. With that being the case, I think the market continues to be one that you need to pay close attention to, as it is so highly volatile and related to risk appetite in general. That being the case, if we can continue to go higher it would be a good sign for the overall global markets, suggesting that perhaps we have more “risk on trading” waiting to happen.

GBP/JPY Video 04.11.21

If we do break down below the ¥155 level, then I think we will see a significant amount of support near the 50 day EMA and of course the ¥152.50 level, an area that previously had been significant resistance. A bit of “market memory” should come into play there as well so all things being equal, I think this continues to be a “buy on the dips” type of situation. While it would be considered ugly, you could make an argument for a bit of a bullish pennant as well. Either way, I do not have any interest in shorting this market anytime soon, and I do think that it is probably only a matter of time before the buyers come back in and pick things up.

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