GBP/JPY Weekly Price Forecast – British Pound Rallies Significantly

While the candlestick does look rather healthy, the reality is that there are a lot of things out there that could cause issues. After all, the pair is highly driven by risk appetite, and of course we have to worry about Brexit which is still a major problem when it comes to dealing with the British pound. Looking at the chart, we are dancing around the 50 week EMA, which certain people pay attention to but right now I think it is simply far too dangerous to make a longer-term call based upon anything other than the technicals.

GBP/JPY Video 12.10.20

If we can break above the top of the candlestick for the week, then I anticipate that we probably go looking towards ¥138 level, and then perhaps even the ¥140 level. To the downside, the ¥135 level will be supportive, and a breakdown below there could open up a move down to the ¥133 level. All things being equal, I think this is a market that continues to be very difficult for longer-term traders, because it is so choppy, and we are trading on the latest rumors when it comes to Brexit.

That being said, we are essentially in the middle of the larger consolidation area, so this is essentially a “medicine ball” to use a sports analogy. In other words, somebody is getting hurt but we are not necessarily sure who it is going to be. This pair will continue to be very erratic, and even though we are starting to show signs of going higher, it is worth noting that we have come nowhere near wiping out the damage from the negative candlestick a month ago.

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