GBP/JPY Price Forecast – British Pound Gives Up Early Gains Against Yen

The British pound initially tried to rally during the trading session on Friday but gave back early gains as we continue to see a lot of noise near the ¥153.50 level. The market is almost certainly going to continue going higher given enough time, but we may have a little bit of choppy behavior in this general vicinity. Take a look at the Monday candlestick, it was an extremely explosive one and also one that broke above resistance, so I do think we have further to go. This does not mean that it is necessarily going to be easy, but I think eventually we go looking towards the ¥155 level which is my medium-term target.

GBP/JPY Video 17.05.21

The Japanese yen has been on the back foot against a multitude of currencies, not just the British pound. With that in mind, I like the idea of buying dips on signs of support and will continue to do so. I have no interest in shorting this pair and recognize that all the way down to the ¥150 level there are multiple short-term spots that could offer significant support. With this being the case, I think what we are looking at is a scenario where you buy the dip on lower time frames and try to build a larger position for a bigger move. It is not until we break down below the ¥150 level that I even remotely consider shorting this market, so at this point it is simply a matter of waiting for something like a hammer on one hour chart to get involved.

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