GBP/JPY Price Forecast – The British pound reaches top of channel

The British pound has rallied a bit during the trading session on Tuesday but pulled back to form a less than impressive candlestick. At this point, it looks very likely that we are going to pull Bank and reach towards the ¥145 level. In that area, I would expect to see buyers come back in and trying to lift this pair a bit. This will be especially true if overall risk appetite picks up and push as this pair higher.

GBP/JPY  Video 27.02.19

Beyond that, the market looks very likely to react positively to the idea of a delayed Brexit, something that Teresa May has recently just suggested she was opened to. Simply put, I like buying dips in this pair because not only do we have a bullish flag that  I marked on the chart, but we also have a micro bullish flag that has kicked off as well.

Short-term pullbacks should be buying opportunities and I think it’s not until we break down below the ¥143 level that you should worry about any type of pullback. The alternate scenario of course is that we break above the shooting star for the candle stick on Tuesday, which would be a complete breaking of resistance and opens the door to the ¥150 level, and then possibly even the ¥155 level given enough time based upon the larger bullish flag. At this point, I have no interest in shorting this pair because I think there is more than enough support underneath.

Please let us know what you think in the comments below