GBP/JPY Weekly Price Forecast – British Pound Finds SupportThe British pound broke down below the ¥150 level during the course of the week, but then turned around to form a bit of a hammer.
The British pound has fallen a bit during the course of the week to break down below the ¥150 level, an area that of course is a large, round, psychologically significant figure. That is an area that will attract a lot of attention and has offered support for a couple of different attempts at breaking down. That being said, the market is still overextended so I do think that eventually we need to either pull back there or simply kill time in order to get rid of the excess froth in the market.
GBP/JPY Video 19.04.21
If we do break down below the last couple of candlesticks, then it is likely that the British pound drops to the ¥145 level, but at that point I would anticipate seeing a lot of support as well. We are obviously in an uptrend so I do think that it is only a matter of time before we try to go higher, assuming that we can continue a “risk on” attitude. Otherwise, if we see some type of market shock or “risk off” type of move, then it is markedly negative for this market and then I think that what we are looking at is a situation where this is simply going to go back and forth with the idea of how the market is “feeling.”
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Ultimately, the ¥153.50 level above being broken could open up the possibility of a move towards the ¥155 level. That of course is the next large, round, psychologically significant figure, and it will almost certainly cause a bit of profit-taking. I think it is a tempting target for the buyers, so will have to wait and see whether or not they can make that happen.
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