GBP/JPY Weekly Price Forecast – The British Pound Has Had a Wild RideThe British pound initially pulled back against the Japanese yen as we continue to have a lot of noise surface about the Brexit situation.
The British pound broke down significantly during the course of the week, reaching down towards the 50 week EMA before turning around to form a bullish candlestick. Ultimately, this is a market that then broke above the ¥140 level as it looks like the Brexit situation is starting to come close to a brokered deal. If that is going to be the case, then it should lift the British pound, or at least lift some of the weight around its neck. At this point in time though, this pair will then have to reassess everything as to what is going to drive the next move.
GBP/JPY Video 28.12.20
It should be noted that there is significant selling pressure just above at the 200 week EMA and perhaps even the ¥145 level. Given enough time, I think we will probably get a little bit of a pullback in order to find value the people may try to get involved. Having said that, I think that we have a lot of noise underneath so that should offer a significant amount of support, at least in theory. Once we do get past all of the Brexit noise, then this pair will probably start to reflect on the idea of risk appetite in general, rising right along with it, and of course falling if it does as well.
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I anticipate that this will be a very difficult to trade in either direction over the next couple of months, as we sort out everything that happened in 2020. The British economy is going to struggle, so I think the upside is probably somewhat limited once we get past the celebration of Brexit being done.
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