GBP/JPY Weekly Price Forecast – British pound bounces slightly

The British pound initially fell during the course of the week, reaching down towards the 134 young level before bouncing significantly to form a bit of a hammer. That being the case, although it does look very bullish, the reality is that this market is oversold.
Christopher Lewis
GBP/JPY weekly chart, July 22, 2019

The British pound broke down significantly during the trading sessions that made up the week and cleared the ¥135 level. However, as we are starting to close the week, we are getting close to that level again. At this point, it is technically a bullish sign but at the end of the day we are still very bearish in this market, and of course the Brexit causes a lot of issues when it comes to the British pound in general. Ultimately, even if we break above the top of the candle stick, I think that the ¥138 level above will be resistance. Overall though, I think it’s only a matter of time before the sellers reenter.

GBP/JPY  Video 22.07.19

Looking at this chart, as we are well below the 61.8% Fibonacci retracement level, it’s likely that we do wipe out the entirety of the move. That means that we will probably be going down to the ¥131.50 area, which is the 100% Fibonacci retracement level. I have no interest in buying the British pound, and quite frankly if you are looking to go against the Japanese yen, you can probably find more momentum to the upside with the Australian dollar or New Zealand dollar as they offer the same type of volatility this pair does but it doesn’t have the Brexit headline risk associated with it. That being the case, I believe that this is a market that we either sell off on rallies that show signs of exhaustion or sell on a break down below the bottom of the candle stick. As far as buying is concerned, like I said – I would be looking in other markets.

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