GBP/JPY Weekly Price Forecast – continued sideways action
The British pound did very little against the Japanese yen during the week, although it did rally a bit. Ultimately, this market is somewhat sideways as we worry about trade wars between the United States and China, and of course this has a major influence on what happens in the Japanese yen. Beyond that, this is a sensitive pair, and that of course will show itself in the chart. It looks as if the ¥144 level underneath is massive support, but I also see an extraordinarily amount of resistance at the 148 level.
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For the longer-term trader, they’re going to need to see some type of resolution to the trade war, and then at that point the be more comfortable about buying. I think that if we do get a cooling of tensions, this pair will almost certainly shoot to the upside and go looking towards the 150 level, followed by the 155 level. Otherwise, if things get worse I suspect that we may drop down to the ¥140 level, and at this point it’s all about the headlines and random tweets. With that in mind, this is a very difficult market to trade for the longer-term in this environment. I anticipate that short-term traders will continue to flock to this market in a back and forth type of situation, but beyond that it’s going to be a lot of noise.