GBP/JPY Price Forecast – Pulling Back Towards Big Figure AgainThe British pound has fallen a bit on Monday, as we are reaching towards the ¥140 level. This is an area that of course has a lot of ramifications.
The British pound fell hard against the Japanese yen during trading on Monday, reaching down towards the ¥140.50 level. Ultimately, the ¥140 level might be the destination, as it is a large, round, psychologically significant figure that will attract a certain amount of attention by itself. Furthermore, we do see structural buying just underneath in and of course the 50 day EMA is starting to race towards that area as well. All of this adds up to a confluence of potential positive momentum, so therefore I think that the downside is somewhat limited from here.
GBP/JPY Video 19.01.21
This is not to say that we cannot go further, just that the ¥140 level should attract quite a bit of attention. To the upside I believe that the ¥142.50 level will continue to be difficult based upon previous action, but it more than likely will be the target. Keep in mind that this pair is highly sensitive to the risk appetite and profile of traders around the world, so it is worth paying attention to whether or not assets are rising or falling. As a general rule, this pair will rise right along with stock markets and the like, because people are willing to sell the relative safety of the Japanese yen to step out on to the risk curve.
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This is probably just as important to this momentum these days as Brexit was just a few months ago. Nonetheless, I think there is a lot of noise out there, so you need to be very cautious about your position sizing but certainly it looks like we are getting close to some type of major support.
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