GBP/JPY Price Forecast – risk aversion continues to plague British pound

The British pound initially tried to rally against the Japanese yen but turned around to fall back below the ¥145 level. While there is a significant amount of support underneath, the reality is that we have been in the descending channel for quite some time, and rallies continue to be sold. It’s not until we get some type of resolution to the Brexit that I think this pair can really take off. Beyond that, it’s very sensitive to global trade and of course with the US/China problems out there, global trade is in trouble.

GBP/JPY  Video 20.11.18

I see support at the ¥142.75 level, but if we break down below there it opens the door to the ¥140 level next. I think that rallies are to be sold at the first signs of exhaustion, which has been the course for some time now. This is a market that is going to be heavily influenced by risk appetite, which of course is very soft right now.

I suspect we may get a little bit of a bounce from here, but that bounce will be sold into, and that we will eventually break down towards the bottom of the channel again. In fact, I am not a buyer of this pair until we can clear the ¥150 level on a daily close. It’s not that you can’t make money on the upside, it’s just that it’s much more difficult than making money on the down.