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

The British pound try to rally during the course of the week, but then struggled to stay above the ¥135 level. This is almost a mirror image of what we are seeing in the GBP/USD pair, as it is struggling at the 1.25 handle.
Christopher Lewis
GBP/JPY weekly chart, July 29, 2019

The British pound initially rallied for the week, but then rolled over to show signs of exhaustion. The candle stick of course is a bit negative, and it suggests that we are probably going to go lower. If we can break down below the previous week, then it’s likely that we could go down to the 100% Fibonacci retracement level, as we are well below the 61.8% Fibonacci retracement level. On that breakdown, it sends the market down to the ¥131.5 level underneath. Even if we did rally from here I think that there is still so much in the way of negativity that it’s going to be difficult to go long of this pair.

GBP/JPY  Video 29.07.19

I see the ¥137.50 level above being massive resistance as well, so it’s not until we break above there that you can take any rally seriously regardless. That is very likely the best way to look at this market. This is a scenario that looks like you simply wait for signs of exhaustion on rallies and then take advantage of the Japanese yen being “cheap.” The market participants out there continue to have to worry about a lot of headlines that will could cause issues with Sterling anyway. The market participants out there continue to monitor political headlines, and as long as there is a lot of uncertainty out there, it’s going to be difficult to imagine a scenario where people are wanting to risk what could happen here. Beyond that, keep in mind that the geopolitical uncertainty favors the Japanese yen over the British pound anyway.

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