GBP/JPY Price Forecast – The Dragon falls

The British pound broke down significantly during the trading session on Wednesday, as traders came back to a world of worries. At this point, I suspect that we will continue to go much lower, but you are probably going to be better served to wait for some type of short-term bounce that you can sell. Quite frankly, we had sold off so hard that I think we could probably get that bounce that we can sell into. This is a market that is very sensitive to risk appetite globally, and of course we have the added benefit of being able to trade the Brexit, which is all negativity at the moment.

GBP/JPY  Video 03.01.19

We are getting close to the bottom of the descending channel though, so I would expect some type of support to return. That support should be short-lived and if you are patient enough you should get obvious set ups to take advantage of. The initial resistance would of course be the ¥140 level that we just sliced through. While that seems like it’s a far way off, this pair moves so rapidly we could get there in a couple of hours.

Just as with the British pound against other currencies, I presently have no interest in buying this pair as the Brexit will continue to cause far too many issues. If we do get good news about the Brexit, either a deal or at least signs that we are about to get one, then perhaps you can start to think about going long. Someday, this will be a great long position to start building up but that’s not today.