GBP/JPY Price Forecast – British pound breaks out

The British pound broke out to the upside during the trading session on Wednesday as Labour seems ready to agree to an extension and delay to the Brexit. That being said, it looks as if we are heading towards the 200 day EMA, and with the Japanese saying overnight that we are likely to see loose monetary policy in the short term, due to global tensions, it makes sense that we continue to go higher.

GBP/JPY  Video 24.01.19

That being the case, I think that short-term pullbacks will offer buying opportunities, but I also recognize that we probably need to keep this in perspective. The reality is that much of the move higher has been based upon the premise of a delay of Brexit, so for the most part it’s probably already priced into the market. If that’s the case, then the upside is probably somewhat limited at this point. I would anticipate that the 200 day moving average will probably cause some issues, but I also recognize that the GBP/USD pair has already broken above the 200 day EMA. Because of this, I think confusion will still rain and after this massive move higher I think that although there’s some way to go to the upside, somewhere around the ¥145 level I suspect the sellers will come back, especially if there’s some type of negative headline spooking the market, setting the algorithmic traders on fire again.