Advertisement
Advertisement

GBP/JPY Price Forecast – resignations rock the British pound

By:
Christopher Lewis
Updated: Nov 15, 2018, 16:18 UTC

Continue to see a lot of resignations in the cabinet of Teresa May due to the Brexit deal, so it looks as if the British pound will continue to deal with a lot of political negativity. At this point, it’s just more of the same.

GBP/JPY daily chart, November 16, 2018

The British pound has broken down a bit during the trading session on Thursday, slicing through the ¥145 level. We are starting to stabilize a little bit though, and at this point I think that the market isn’t ready to collapse completely. However, we also know that every time this market rallies, sellers come back into play. That makes a lot of sense because of the Brexit and a lot of the concerns that we have seen. Those headlines continue to be a major problem with trading the British pound overall.

GBP/JPY  Video 16.11.18

I do believe that the ¥145 level will offer a bit of psychological support, but we also have the other problem to face right now when it comes to this market: the US/Chinese trading spat. After all, this pair is highly sensitive to trade and global growth, not to mention the fact that the Japanese yen is sensitive to China itself anyway. With that being the case, there is a certain amount of a “risk off” attitude in this pair regardless of the Brexit, so I think it’s difficult to imagine a scenario where this market breaks out to the upside and above the psychologically and structurally important ¥150 level until we get some type of good news from the Brexit or perhaps even the trade negotiations. I don’t see the one of those happening in the short term, so rallies will continue to offer selling opportunities from what I see.

About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

Did you find this article useful?

Advertisement