GBP/JPY Weekly Price Forecast – Sterling falls but has support underneathThe British pound fell during the bulk of the week, in terms of Japanese yen. However, there seems to be a significant amount of support just below in the form of the ¥145 level, and we most certainly have not broken below there.
The British pound fell during the bulk of the week, at least against the Japanese yen. The ¥145 level underneath looks to be important still, and I believe that there are plenty of value hunters underneath there to try to keep the market afloat. However, if we were to break down below the hammer from a month ago, extensively the ¥143 level, then I think the market probably breaks down a bit.
Keep in mind that the British pound has to worry about the Brexit, and all of the political theater that goes with that situation. Because of this, I think if you are going to trade the Japanese yen, the British pound it might be a bit of an under performer, especially if we bounce and continue to go higher. However, if the Japanese yen suddenly find strength in the market, this might be one of the first places you go to start shorting. This is because you have a soft British pound with a surging Japanese yen as a perfect storm.
The market is also very sensitive to global headlines in general as it is a “risk barometer” that people should pay attention to. I believe that the overall attitude of the market remains more of a “wait-and-see” attitude, which isn’t surprising considering we are in the dead of summer. However, I think longer-term traders are waiting to see some type of impulsive candle to either buy or sell. I think this remains the domain of short-term traders.