GBP/JPY Weekly Price Forecast – Pound Gives Back Important GainsThe British pound initially shot higher against the Japanese yen during the week but has given back a significant amount of the gains as you can see.
The British pound has rallied significantly during the course of the week, but you will notice that at the ¥140 level we have seen a lot of selling pressure. That being said, we have given back about half of the gains for the week which of course is not a good look. This does not mean that we cannot go higher, just that is not going to be as easy as some people may have thought earlier this week. On the daily chart, we formed a classic shooting star right at the ¥140 level, something that you would have to be looking towards if you are a short-term technical analysis type trader.
GBP/JPY Video 16.11.20
Looking at the chart, we continue to form a bit of a symmetrical triangle, which shows just how confused the market really is. This makes sense considering that Brexit is still out there waiting to cause headaches, and therefore one would have to think that it is only a matter of time before something happens. At this juncture, it looks like the ¥138 level is going to be a little bit of a magnet for price, which makes sense considering that is roughly right in the middle of the range that we had been in.
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If that is going to be the case, then I like the idea of waiting for a breakout of the ¥135 level to the downside, or the ¥140 level to the upside to place a longer-term “buy-and-hold” or “sell and hold” type of trade. I think were range bound, and that tends to lend itself to shorter time frames.
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