GBP/JPY Weekly Price Forecast – British pound slices through support against yen

The British pound broke down significantly during the week, reaching towards the 143 level, and breaking through the 61.8% Fibonacci retracement level during the week. As the major destruction during the week has continued, I suspect at this point every time we rally there will be sellers coming in to punish this pair even further. This is the poster child for risk aversion, and I think at this point we are more than likely going to see the market make a move towards the ¥140 level. I also recognize that we are a bit oversold so a bounce most certainly could come, but I would look towards the daily charts perhaps for some type of bounce and exhaustion to take advantage of. I do believe that the ¥140 level is going to be crucial, and a break down below there could send this market much lower. In fact, it would be a bit of a panic and we could really see some major destruction from a technical standpoint.

At this point, we need some good headlines crossing the wires for or anyone to feel comfortable owning this pair, most notably with the Brexit, but also with the trade war headlines around the world. In other words, there are so many negative moving pieces out there for this pair that it’s going to be extraordinarily difficult to imagine a scenario in which we are buyers. If we do break above the ¥145 level on good news, there is the possibility of building a long position, but right now it looks very unlikely. Quite frankly, the one thing saving this pair right now as the weekend.

GBP/JPY  Video 29.10.18