GBP/JPY Price Forecast – Pound Continues Relentless Grind Higher

The British pound has shown itself to be somewhat resilient during the trading session as we initially pulled back, only to form bullish pressure yet again. It looks as if we are trying to break out to the upside and clearly a lot of traders out there are banking on the idea of some type of Brexit resolution and of course more global growth due to the vaccine being released. Remember, this pair is not only driven by fundamentals in the United Kingdom, but it is also driven by risk appetite.

GBP/JPY Video 01.12.20

All things being equal it looks as if this is a market that should be bought on dips as there has been a steady flow of buyers willing to jump in and take advantage of it when it drifts a little bit lower. Ultimately, I do believe that we eventually break above the ¥140 level, which is the next major resistance barrier. Once we clear that, then it opens up a move towards the ¥142.50 level above. To the downside, I do see a significant amount of support at the 50 day EMA which is roughly ¥137.50, an area that was tested recently and held its own against quite a bit of selling pressure.

Because of this, I believe that we are still essentially in a trading range that was defined couple of weeks ago, roughly between ¥137 and ¥140. I think until we get some type of resolution with Brexit, it might be difficult to break out to the upside, but we almost certainly will once that situation has been settled finally.

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