GBP/JPY Weekly Price Forecast – British Pound Gives Up Gains

The British pound initially tried to rally during the week but gave back the gains to show signs of exhaustion. Ultimately, the market is likely to see selling on rallies in the short term, unless there is more of a “risk reversion” in other words, people would be looking to buy anything risk appetite. I think the last couple of days have been rather drastic, at least in some of the risk appetite markets that most people follow. The NASDAQ 100 has gotten absolutely crushed, just as the S&P 500 has. This tells you that there is a lot of fear out there when it comes to risk appetite, so with that in mind it makes sense that this pair would follow right along as the Japanese yen is considered to be a “safety currency.”

GBP/JPY Video 07.09.20

From a technical analysis standpoint, the 200 week EMA has offered significant resistance, near a massive supply zone so I think all of this lines up quite nicely. I am not saying that this pair breaks apart here, just that it will more than likely try to break down below the ¥140 level and perhaps try to find support again at the ¥138 level where we had rallied from two weeks ago. Either way, you can expect a lot of volatility now that vacation season is over, and more traders are coming back to work. The alternate scenario of course is that the market turns around to break above the top of the shooting star for the week, which would be a massively bullish sign.

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