GBP/JPY Weekly Price Forecast – British Pound Continues to Show Signs of Strength

The British pound has fallen a bit during the course of the week to reach down towards the ¥155 level. That is an area that previously has been resistance so it should not be a huge surprise that it is now offering support. However, if you look to the far left of the weekly chart you can see that this is a general vicinity of resistance that has come into play more than once, and therefore it makes a certain amount of sense that we would see hesitation.

GBP/JPY Video 07.05.21

All things been equal, I think that the market is probably going to have to grind sideways in order to work off some of the excess froth from the most recent impulse higher. Nonetheless, there is nothing on this chart that tells me we should be selling it, so if I were forced to take a trade it would most certainly be to the upside. However, I think that we are setting up for more of a grind in order to work off some of the excess froth.

As far as selling is concerned, the market needs to break down below the ¥150 level before I start to look at trades in that manner. In general, I think that dips should be thought of as potential buying opportunities as it could represent value in a market that is so obviously pressure to the upside. Keep in mind also that this pair is highly sensitive to risk appetite in general, and therefore other markets can have a bit of a psychological influence on this pair as the Japanese yen is considered to be a safety currency.

For a look at all of today’s economic events, check out our economic calendar.