GBP/JPY Weekly Price Forecast – British pound explodes to the upside against yen

The British pound exploded to the upside against the Japanese yen, as the Brexit deal looks to be delayed. This gives hope of the British doing a second referendum, which I don’t think happens. However, the market is pricing in that a better situation than a “no deal Brexit” it’s about to happen.
Christopher Lewis
GBP/JPY weekly chart, January 28, 2019

The British pound exploded to the upside during the trading week, breaking above the ¥143 level easily. On Friday, we are testing the 200 day EMA, pictured on the daily charts. The ¥145 level should offer resistance as well, so I do think that we are getting close to an area where we may see a bit of a pushback. That doesn’t mean that I want to short this pair, what I believe is that we are simply looking at a pullback to find support, perhaps somewhere closer to the ¥142 level.

GBP/JPY  Video 28.01.19

Keep in mind that this pair is going to be highly sensitive to the Brexit deal, and of course headlines coming out on Twitter and news outlets. Overall, I also believe that this pair will be reacting to the US/China trade, as the pair is typically highly sensitive to global trade. Remember, the Japanese yen is also considered to be a bit of a safety currency, so if we get a lot of bad news out of that scenario, it would put downward pressure on this pair. When you look at the chart, you can see that we are still in a descending channel, which although pierced, we close on the weekly chart back within that range. Because of this, I do think that the upside is somewhat limited, but I do believe that we will go looking towards the top of the channel initially. Look for short-term pullbacks to take advantage of value.

Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.