GBP/JPY Weekly Price Forecast – British pound continues volatile momentum against yen

Trading this market is going to be a bit difficult for the longer-term investor until we can get some type of clarity from a couple of different events. First and foremost, we need to have some clarity involving the Brexit, something that we clearly don’t have right now. As long as that’s going to be the case, I think that people will be a bit hesitant to hold onto the British pound, except for possibly longer term value investors. As soon as we get some type of certainty when it comes to the Brexit, I think you will see a major relief rally in the British pound against most currencies.

GBP/JPY Video 05.11.18

The other thing that we need to pay attention to is the state of Sino-American relations, as this pair is highly sensitive to trade and geopolitical events. If we can get a deal between the Americans and the Chinese, it’s likely that this pair will rally along with other risk assets around the world. This pair is extraordinarily sensitive to that type of action, and I suspect we would be looking at ¥150 rather quickly.

I would also direct your attention to the British pound against the US dollar. That weekly chart features several shooting stars just above current pricing where we failed at the 1.30 level to break out decisively. Because of this, I believe that we are going to see a little bit of selling pressure going forward. I don’t necessarily think that we are going to see a massive breakdown, but I also recognize that we are a bit skittish overall and that will more than likely be an issue.