GBP/JPY Weekly Price Forecast – British pound continues to descend

The British pound fell during the course of the week, breaking the back of the hammer from the previous week, which of course is a very sign. However, the ¥140 level underneath is massive support, and therefore I would be surprised at all if we find this area able to cause a bit of a bounce. However, we are in a major downtrend channel, and I believe that means that eventually the sellers will return. The alternate scenario is that we get a daily close underneath the 140 young level, which opens the door to somewhere near ¥137 next.

GBP/JPY  Video 24.12.18

The geopolitical and global macro situation certainly favors a downward move as well, because we have the Brexit, which of course is the gift that keeps on giving if you are shorting the British pound, but beyond that we have trade wars and concerns around the world when it comes to global growth. At the end of the day, this is a bit of a perfect storm for lower pricing. I look at rallies as an excuse to sell at higher prices. I believe the Japanese yen will be one of the better performers for next year, and as we go into the holidays we are starting to see money move in that direction. This doesn’t mean there will be the occasional bounce, most certainly there will be, but until something significantly changes with the Brexit at the very least, this pair should be sold on rallies.