GBP/JPY Weekly Price Forecast – British Pound Likely to Pull Back
The British pound has shot higher during the course of the week, only to give back the gains in order to form a bit of a shooting star. The shooting star of course is a very negative candlestick and does suggest that we are going to pull back in order to find buyers. The most recent break out of course has been massively bullish, and of course we have seen far too much in the way of overextension to think that we should start getting long at this point. I think it is only a matter of time before this market pulls back, but I think there should be plenty of support near the ¥155 level. Ultimately, this is a market that I think has to give back some of these gains in order to build up enough momentum to continue going higher. With that in mind, I do anticipate that value hunting will be the best way forward.
GBP/JPY Video 25.10.21
If we were to turn around a break above the top of the candlestick, that would obviously be bullish, but I do not like the idea of chasing this trade when it has gone so far. All things being equal, this is a market that I think will continue to see a lot of volatility, but I do think that there are plenty of buyers underneath that will get involved. Looking for value is the only way to trade something like this, and of course you need to keep in mind that this pair is highly sensitive to risk appetite around the world. Pay attention to what other markets are doing.
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