GBP/JPY Price Forecast – British Pound Continues to Struggle
The British pound went back and forth during the trading session overall on Tuesday, but it certainly looks as if we are more likely to break down than up, as the 200 day EMA continues offer resistance. The candlestick looks horrible, and at this point I think we are going to make a serious attempt to break down below the ¥135 level. If we do, that will more than likely kick off another leg lower in this pair, which could signify not only British pound falling apart, but perhaps a major “risk off” type of situation.
GBP/JPY Video 16.09.20
Rallies at this point have to be looked at with a significant amount of skepticism, because quite frankly we have seen the sellers step in any time this market tries to rally. A breakdown below the ¥135 level will open up a move to the ¥134 level rather quickly, and then eventually to break down towards the ¥132.50 level. Having said all that, if we were to break above the 200 day EMA it would be impressive, and it is likely that we could go looking towards the ¥138 level. I think the one thing that you can take away from this is that there is going to be a lot of volatility.
Your capital is at risk
Unfortunately, the reality is that it is only a matter of time before we see some type of rumor or headline out there about the Brexit that will send the British pound screaming in one direction or another, so you should be very cautious about any position you put on, and would probably be better served by putting on about half of the normal position you typically would.
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