GBP/JPY Price Forecast – Pound Pulls Back From Major Resistance

The British pound has pulled back a bit during the trading session on Tuesday, as we had formed a shooting star on Monday just below the ¥145 level. The fact that we have pullback should not be a huge surprise due to the fact that the ¥145 level is a large, round, psychologically significant figure. That is an area that has been important more than once in the past, and if we can break above there it would be a major sign that the market was going much higher. That being said, I do not necessarily think that you can get big in this position quite yet, because the ¥145 level could cause resistance for quite some time. On the other hand, if we get a pullback of substance, then you may be able to find a little bit of value underneath by picking up the market closer to the ¥142.50 level.

GBP/JPY Video 10.02.21

The market is a little overbought at this point, so it would not be surprised to see quite a bit of noisy trading, as the market cannot simply go straight up in the air forever. The British pound has broken out against the US dollar, which is a huge sign of its inherent strength, but at the end of the day this market might be a little overdone in the short term. Regardless, I am not looking to short this market, I am looking for value underneath. I think we may have quite a bit of time to make this trade, but a daily close above the ¥145 level of course would have me be enforced into this trade to the upside.

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