GBP/JPY Weekly Price Forecast – British pound continues to struggle with resistance aboveThe British pound rallied during the week but struggled with the significant resistance barrier at the ¥150 level. I think at this point it is clear that the British pound is trying to break out, as we have cleared a major downtrend line, but we obviously have a lot of psychological resistance to deal with also.
The British pound has spent the week trying to rally but has given back a bit of the gains against the Japanese yen. It’s not a huge surprise, because quite frankly the ¥150 level is about as big of a “round number” as you can get. It’s also a scene of the previous resistance and of course support, so at this point I think that the overall attitude of the market will continue to be one that wants the breakout, but this pair is focusing on a couple of things right now, which obviously would be the Brexit, and of course the global trade war that seems to be heating up.
The downtrend line that was broken since below, and that should be a good sign for this market, but I also think that we have a lot of volatility ahead of us. At this point, I remain bullish but I’m looking for a small position until we can clear the ¥150 level on a daily close. Once we get that, then I think it’s time to start adding to your position. Recognize that trend changes are very volatile, and therefore you should not expect rewards right away. This is most certainly more of an investment than a trade. If we break down below the downtrend line and perhaps the weekly candle from the previous week, then I think the market unwinds towards the ¥145 level, and then the ¥140 level after that.