GBP/JPY Weekly Price Forecast – Pressuring to The UpsideThe British pound has initially fallen during the week, breaking below the ¥140 level again. However, we ended up turning around to form a bit of a hammer.
The British pound initially fell during the course of the week, breaking below the ¥140 level. By doing so, the market found quite a bit of value hunters down there again and has turned around to form a bit of a hammer shaped candlestick. This suggests that we are going to see a bit of a squeeze on the sellers, and ultimately try to break above the 200 week EMA. I think eventually this pair probably goes looking towards the ¥145 level, which is the next major round figure. However, that does not mean that it is going to be easy to get there, and therefore you should expect quite a bit of volatility from time to time.
GBP/JPY Video 11.01.20
With all of that being said, I like the idea of buying dips and I recognize that longer-term traders are trying to push this pair much higher, perhaps closer to more historic norms. The idea of the “reflation trade” bodes well for shorting the Japanese yen against most currencies, and this pair is most certainly a “risk on” type of market. Because of this, I would look at this as a market that should offer plenty of opportunities on the way up due to the fact that the UK economy is locked down, but most trader participants are starting to look past that scenario. If that is going to be the case, then it is very likely that we should see forward looking traders trying to push this pair much higher over the longer term.
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