GBP/JPY Price Forecast – British pound continues to go lower
The British pound fell during the trading session on Monday to kick the week off, as we continue to have a lot of fear around the world. We did bounce a bit during the European session, but there are still plenty of reasons to think that the market will continue to drift lower. This doesn’t mean we will get a significant bounce, but frankly we are a bit overdue. However, I see a couple of different levels above that could cause some issues. With that in mind, a bounce will be looked at as an opportunity to sell again, not a buying opportunity.
GBP/JPY Video 06.08.19
The market is overextended to the downside and has broken down below the ¥130 level. I believe that the ¥130 level should be resistance on the way up, and most certainly the 20 day EMA, which is colored in green will also offer a significant amount of resistance. It currently is at the ¥132 level, so I think that area will be difficult to break above, and therefore it also catches my attention that we have an inverted hammer at that level, which could show a lot of trouble. Beyond that, ¥135 is also a massive resistance barrier. It’s not until we break above that level that I would start to take a reversal seriously. I know that’s quite far away, but we have been in such a negative feedback loop that it’s difficult to imagine a scenario where this market rallies without the Brexit being in our rearview mirrors.
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