GBP/JPY Price Forecast – Pound Shoot Straight Up on Brexit Hopes
Headlines suggesting that a temporary deal could be used to extend Brexit negotiations have been filtered into the market, and pound has reacted as expected.
The British pound has rallied during the trading session, shooting straight up in the air as people get usual reaction due to the idea of an extension of a temporary deal in order to avoid a hard Brexit. However, at this point in time nothing is known for sure, and the market is moving on rumors yet again. With that being the case, I do believe that we could make a move towards the ¥140 level, but at that point it is very unlikely that the market will be able to shoot through there without some type of major resistance.
GBP/JPY Video 24.11.20
Because of this, short-term traders will probably continue to buy dips, especially with the ¥138 level looking so supportive but at the end of the day I do not think we can break through the ¥140 level without further confirmation of good news. Until we get that, it is very unlikely that we would see a breakout. Even if we did, the lid would be somewhere near the ¥142 level. After all, even some type of extension that shows that perhaps people are willing to talk further still does not solve the main issues. The knee-jerk reaction will probably be sold into later in the week, so keep in mind that the upside may still be somewhat limited until we get a finalize deal.
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This is not to say that I would be selling, just that I will be keeping my expectations realistic. I suspect at this point we will only get more volatility, which of course is par for the course as of late.
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