GBP/JPY Price Forecast – British pound shoot straight up during the session, again
“The Dragon” roared during trading early New York Monday, as an EU official suggested that a Brexit deal could be done within two months. If that’s the case, this will do wonderful things for the British pound as we would finally have some type of clarity. Clarity is exactly what the market is demanding, and this is yet another surge higher like we have seen as of late. The difference this time is it wasn’t somebody manipulating social media trading bots. This was an actual quote.
At this point, I think the real tell will be what the GBP/USD pair does. Remember, a currencies relative strength is measured against the US dollar, and it looks as if it is trying to break out and above a major downtrend line. That’s probably the best news for the British pound right now, and therefore I think that we are going to see the trend turned around to the upside sooner rather than later. These last couple of surges higher have shown just exactly how much pent-up demand there is for the British pound.
Your capital is at risk
I think pullbacks are buying opportunities at this point, especially if this comment gets repeated by somebody else in the negotiation process. That would probably be all she wrote for the sellers, and they would be bailing very quickly. The ¥145 level will of course be psychological resistance, but I don’t think it holds in this type of environment.