GBP/JPY Weekly Price Forecast – British Pound Pulls Back Finally

The British pound initially tried to rally during the week but gave back the gains near the ¥152.50 level. At this point, the market certainly looks as if it is about to pullback and quite frankly, I think that is a good thing. You cannot go straight up in the air forever, eventually gravity will come back into play. This is all we are seeing here from what I can tell, as the markets have decidedly turned a bit more risk averse as of late. With that being the case, the Japanese yen is much more attractive than the British pound, and again we are simply overbought so this all makes sense.

GBP/JPY Video 22.03.21

The ¥150 level will be the first support opportunity, but I think we may even pull back below there. The ¥147.50 level would be the next area I pay attention to, and then of course the ¥145 level would be a possible area to look at. I have no interest in shorting this pair right now, because if the Japanese yen suddenly gets a lot of strength due to a “risk off environment”, I am going to short something like the New Zealand dollar against it that will have much more in the way of movement and therefore returns. It is not that you cannot short this market, it is just that it is so strong that I prefer to avoid the question about the British pound altogether. All things being equal, I imagine I will be buying a tip on this chart, but it might take a couple of weeks for things to settle out.

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