GBP/JPY Weekly Price Forecast – British Pound Sitting Above 140 JPYThe British pound has had a somewhat choppy week as we exit 2020 but finds itself sitting above the ¥140 level.
The British pound has gone back and forth against the Japanese yen during the course of the week, as we are sitting above the ¥140 level. The ¥142.50 level above is probably going to be the short-term target, and it is worth noting that the 200 week EMA is sitting there as well. All things being equal, this does look like a market that is trying to pick up momentum to the upside, but it is very sensitive to risk appetite, so keep in mind that we will have to see how traders are feeling in general.
GBP/JPY Video 04.01.20
The biggest problem with this pair is not necessarily the idea of risk appetite, rather it is the problem that the British pound is tied to the British economy which of course is going to be a bit difficult to get a handle on as we have signed the Brexit deal now, but still have a lot of little bits and pieces to worry about. To the downside, I think that we will find plenty of support near the ¥137.50 level, where the 50 week EMA is and we have seen pretty significant structural support.
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At this point in time, I think that we eventually do break out, but the British pound might be a bit of a laggard against the Japanese yen because of the entire trade deal and the coronavirus lockdowns in the country. As a general rule, I am bullish of this pair, but I would feel much more comfortable buying the Canadian dollar, New Zealand dollar, or even the Australian dollar against the Japanese yen. I have no interest in shorting this market anytime soon unless something drastic happens from a global macro risk standpoint.
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