GBP/JPY Price Forecast – Pound Continues to Press Against Highs

The British pound has initially fallen during trading on Tuesday only to turn around and show signs of strength again. As we are trying to break above the ¥142 level for a bigger move, there is probably some work to do in the meantime. I believe that we need to get above the ¥142.50 level to start going higher from a longer-term perspective, and that may take a bit of work. The British pound has been extraordinarily resilient over the last several months, even though the economy has been locked down drastically.

GBP/JPY Video 27.01.21

Perhaps this is driven by the fact that the British pound is “historically cheap”, and therefore longer-term players will be looking at it as a potential value play. The Japanese yen of course is considered to be a “safety currency”, so that has a certain amount of effect on how people play this trade. With that being the case, I think as long as there is more of a “risk on sentiment” around the world, it is very likely that the pair will continue to grind higher. A break above the ¥142.50 level opens the possibility of a move to ¥145, and that is most likely what we will eventually see. With that being the case, I think that short-term pullbacks will continue to be buying opportunities, while the momentum continues to build.

I do believe that eventually we will probably go looking towards the ¥145 level, but I also recognize that there are a lot of variables out there right now they continue to cause havoc when it comes to risk appetite. Because of this, I do think that pullbacks are your friend, and of course position sizing will be crucial.

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