GBP/JPY Weekly Price Forecast – British Pound Breaks Out

The British pound broke out against the Japanese yen during the week, finally slicing through the resistance barrier that had been keeping it down for quite some time. At this point, it looks as if we are ready to continue going higher as the election looms.
Christopher Lewis
GBP/JPY Weekly Price Forecast - British Pound Breaks Out

The British pound has rallied significantly during the trading week, reaching towards the ¥143 level. By breaking above the ¥141.50 level, we had broken out of a rectangle and it now looks as if we are ready to continue going higher. The UK elections are coming next week, and that of course will give us an idea as to what type of Parliament we will be dealing with. If the conservatives get a super majority in the parliament, that will all but assure a quick Brexit. At this point, traders are simply looking for some type of stability and certainty more than any particular outcome from what I can see.

GBP/JPY  Video 09.12.19

I like the idea of buying this pair on pullbacks, and I do believe that the ¥140 level will continue to be massive support. If that’s going to be the case, then I like the idea of building a core position over time, expecting the occasional dip to offer an opportunity to pick up the British pound “on the cheap.” If we were to break down below the ¥139 level then things could change obviously, but at this point I don’t think that’s likely to happen. The ¥145 level has a certain amount of psychological importance to it, but when measuring the bullish flag, it’s likely that we could go to the 149 level above which is also the 100% Fibonacci retracement level. All things being equal, this is a market that continues to look very bullish but there is a lot of noise just above.

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