GBP/JPY Weekly Price Forecast – British Pound Runs Into Resistance Against Japanese Yen

The British pound has rallied initially during the week, but as you can see has ran into a lot of trouble at the ¥135 level, an area that has been structurally supportive and resistive overtime in this pair, so I think it makes sense that we are going to struggle here. Ultimately, I believe that this market will probably pull back, but I also recognize that if we break above the top of the candlestick from the previous week, we go looking towards the ¥137 level. Keep in mind that this pair is also highly sensitive to risk appetite, so at this point it makes quite a bit of sense that it should drift a little bit lower. With particular telling is that while the stock market seems to be “risk on” on Friday, this pair has done almost nothing.

GBP/JPY Video 20.04.20

All things being equal, the British economy being shut down longer than several other ones will continue to weigh upon it, and of course there is significant damage out there that the market has been paying attention to and therefore the Japanese yen makes much more sense to own than the British pound. However, anything is possible, so you don’t want to get into this position with two heavy of a position. Looking at the chart though it’s obvious that there has been a significant amount of momentum lost on the upside and I think that we are going to continue to have to look at. I do believe at this point we are at a serious inflection point.