GBP/JPY Weekly Price Forecast – British Pound Continues FlaggingThe British pound has gone back and forth during the week against the Japanese yen as we continue to hover around the ¥140 level. This is an area that is crucial as it is the 61.8% Fibonacci retracement level, and as the British pound is historically cheap, there is a lot of interest here.
The British pound has initially tried to rally during the week but has given up some of the gains as we continue to go back and forth around the ¥140 level. At this point, the market is very choppy, and therefore I think what we are looking at here is a market that simply waiting to see what happens with the Brexit and perhaps more importantly the election. All things being equal though, as soon as we get some type of certainly, I suspect that the British pound will take off to the upside. Based upon the flag, that could open up the door to a move towards ¥149.
GBP/JPY Video 25.11.19
To the downside, I suspect that the ¥135 level will attract a lot of attention as it is a large, round, psychologically significant figure, and that of course attracts a lot of order flow. Ultimately, this is a market that will eventually make a huge move, but it may be a few more weeks before we get some type of certainly out of the election picture in the UK, so at this point it’s likely that the market is going to be stuck in neutral, but it does seem to favor the upside as we have clearly shown a lot of resiliency at the lower part of the range that we have been forming. Ultimately, I like the idea of buying dips, but I recognize that it may be a while before a significant move is made.
Please let us know what you think in the comments below