GBP/JPY Price Forecast – British Pound Fails to Break Through Resistance.

The British pound has rallied a bit during the trading session on Wednesday, but continues to struggle with the ¥142.50 level, as we have pulled back significantly from that level. Nonetheless, this is a market that will continue to be supported underneath, as there are plenty of buyers on dips from everything that we have seen. The more, I do think that the “risk on trade” will probably continue to be the favored one, but we have a lot of work above that we need to get through.

The ¥140 level underneath continues to be rather important from not only a large, round, psychological important figure standpoint, but the fact that it has previously been both structurally supportive as well as resistive. Because of this, I think that we probably get a short-term pullback towards that area before we may get a bit of extended buying pressure. The 50 day EMA sits just below the ¥140 level as well, so that makes that area interesting from that standpoint. Furthermore, the trend has clearly been to the upside when it comes to the British pound in general, so there is no need in fighting that.

It appears that the trend is trying to build up enough momentum to go to the upside even further, so even though this candlestick suggests that we are going to fall in the short term, I do not like the idea of shorting this pair, rather I think that we are more than likely going to continue to see a deaf opportunities to buy the dip that it is exactly what we should be doing over the longer term.

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

GBP/JPY Price Forecast – British Pound Grind Higher

The British pound rallied against the Japanese yen during trading on Tuesday, breaking above the top of a hammer from the previous session. This is a classic bullish signal, but there is significant resistance above near the ¥142.50 level. I think at this point we will probably have to go back and forth in the short term to build up the necessary momentum, because quite frankly there are a lot of questions when it comes to the UK economy. Do not get me wrong, I am not saying that we should short this market, just that consolidation between the ¥140 level and the ¥142.50 level makes quite a bit of sense.

GBP/JPY Video 20.01.21

If we can break above the ¥142.50 level, then the market is likely to go looking towards the ¥145 level. That is an area that will attract a lot of attention due to previous action in the fact that it is a large, round, psychologically significant figure. Looking back at the support at the ¥140 level, we also have the 50 day EMA coming into the picture so it does make sense that perhaps we would see a little bit of support in that area and go looking towards buying essentially what would be “cheap British pounds.”

Keep in mind that this pair is highly sensitive to risk appetite so it is certainly something that you should pay attention to. If stock markets and other risk assets in general start falling, you will probably have to pay close attention to this pair. However, they will take off to the upside that should continue to add bullish pressure here.

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

GBP/JPY Prepares for Break, Pullback and Bullish Continuation

The GBP/JPY made a deep decline recently. But the rebound up is equally impressive.

The volatile price action makes it difficult to read the charts properly. But we could see this improve if a clear bearish ABC pattern soon appears.

Price Charts and Technical Analysis

GBP/JPY 19.01.2021 1 hour chart

The GBP/JPY 1 hour chart seems to have completed a bearish ABC (pink) at the recent low. The current bullish price action is also unfolding in 5 waves. What does this mean?

It indicates that more upside is expected (green arrows) after price action completes an ABC (pink) down (orange arrows). The bearish retracement is expected after a bullish 5 wave pattern.

Once the ABC is finished, the bulls could retake control and push price action higher again within the larger uptrend (see moving averages).

Only a break below the previous bottom could indicate a pause of the uptrend (yellow and red circles).

On the 15 minute chart, we can see the fluent bearish price action down (red candles) and up (blue candles).

The 5 wave down, however, seems to complete a larger wave C (pink) whereas the 5 wave up is probably part of a wave A (purple).

The ABC pattern remains valid as long as price action respects the support zones (blue boxes). The uptrend targets are located at:

  • The previous top at 142.13
  • The long-term top and Wizz 7 at 142.67
  • A break of the top could indicate a move to 144

GBP/JPY 19.01.2021 15 minute chart

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

Good trading,

Chris Svorcik

The analysis has been done with the indicators and template from the SWAT method (simple wave analysis and trading). For more daily technical and wave analysis and updates, sign-up to our newsletter

 

GBP/JPY Price Forecast – Pulling Back Towards Big Figure Again

The British pound fell hard against the Japanese yen during trading on Monday, reaching down towards the ¥140.50 level. Ultimately, the ¥140 level might be the destination, as it is a large, round, psychologically significant figure that will attract a certain amount of attention by itself. Furthermore, we do see structural buying just underneath in and of course the 50 day EMA is starting to race towards that area as well. All of this adds up to a confluence of potential positive momentum, so therefore I think that the downside is somewhat limited from here.

GBP/JPY Video 19.01.21

This is not to say that we cannot go further, just that the ¥140 level should attract quite a bit of attention. To the upside I believe that the ¥142.50 level will continue to be difficult based upon previous action, but it more than likely will be the target. Keep in mind that this pair is highly sensitive to the risk appetite and profile of traders around the world, so it is worth paying attention to whether or not assets are rising or falling. As a general rule, this pair will rise right along with stock markets and the like, because people are willing to sell the relative safety of the Japanese yen to step out on to the risk curve.

This is probably just as important to this momentum these days as Brexit was just a few months ago. Nonetheless, I think there is a lot of noise out there, so you need to be very cautious about your position sizing but certainly it looks like we are getting close to some type of major support.

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

GBP/JPY Weekly Price Forecast – British Pound Touches 200 week EMA

The British pound has gone back and forth during the course of the week, reaching towards the 200 week EMA, which has been important more than once, thereby it is not a huge surprise to see that we pulled back from there. At this point, the market continues to see the ¥140 level underneath as massive support, and therefore I think that if we pull back towards that area, we will see people continue to push this market to the upside. On the other hand, if we were to break above the top of the candlestick for this previous week, then the market could go towards the ¥145 level.

GBP/JPY Video 18.01.20

The market is trying to get back towards a more historic norm price, and therefore I think that we do eventually see this market going to the upside. The ¥150 level is probably the longer-term target, but that might be something that we are looking at towards the end of the year, assuming that we continue to see a reflation trade and of course that the United Kingdom turn things back around after the Brexit fiasco and of course the lockdowns. At this point, I think we will probably see a lot of noise in general, so keep in mind that your position size needs to be small enough to make it a reasonable trade to be involved in, but at this point I think you do get an opportunity to pick up value underneath and should look at pullbacks as a bit of a gap. I do not have any interest in trying to short this market, at least not until we were to break down below the ¥137 level.

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

GBP/JPY Price Forecast – British Pound Pulls Back Against Yen

The British pound pulled back rather significantly against the Japanese yen during the trading session on Friday, perhaps taking a bit of a breather in what has been a very strong move to the upside. The ¥142.50 level was tested, and that we pulled back from it. I think at this point though, there are plenty of buyers underneath that will take advantage of a potential support level all the way down to the ¥140 level. That being the case, the market is likely to continue to see noisy behavior, which will be especially true in a pair like this.

GBP/JPY Video 18.01.21

Keep in mind that the pair does tend to be sensitive to risk appetite in general, so do not be surprised at all to see this go back and forth with stock markets and the like. Ultimately, this is a market that I think continues to be a “buy on the dips” type of scenario, as the British pound is still historically cheap, and therefore there should be a bit of a pushback towards the upside again, given enough time. The ¥140 level is an area that should attract a certain amount of attention, and therefore I would be very interested in buying this market down at that area on some type of bounce.

The 50 day EMA is approaching that level as well, so that of course can come into play as well. I have no interest in shorting this pair, at least not anytime soon but do recognize that the macroeconomic picture is a very fluid one at the moment.

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

GBP/JPY Price Forecast – British Pound Running Into Resistance

The British pound initially tried to rally during the trading session on Thursday but has run into the same resistance that we found during the previous session near the ¥142.50 level. Look at this chart, you can see that we are trying to form another shooting star, just as we had during the previous session. If we do get that candlestick, it is likely that the market should pull back to look for support underneath near the ¥140 level. That is an area that will of course attract a certain amount of attention, not only due to the fact that it is a large, round, psychologically significant figure, but it is also an area where we have seen structural resistance previously. The 50 day EMA is starting to reach towards that level as well, so all things being equal I think that is an area that will cause a certain amount of noise.

GBP/JPY Video 15.01.21

To the upside, if we can break above these couple of candlesticks over the last 48 hours, the market probably goes looking towards the ¥145 level. That is an area that would of course cause a significant amount of interest as well, due to the fact that it is a large figure, but also when you look at historical charts, you can see that the market has reacted there previously. Keep in mind that this pair is highly sensitive to risk appetite, so that of course is worth paying attention to as well. Ultimately, this is a market that will continue to be very noisy, so you need to keep your position size rather reasonable in these volatile times.

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

GBP/JPY Price Forecast – British Pound Slams Into Highs Again

The British pound has rallied a bit during the trading session on Wednesday to reach towards the ¥142 level again. This is an area that caused resistance previously, so it should not be a huge surprise to see that we have pulled back. At this point, I think the market pulling back is simply trying to build up enough pressure to continue going higher. After all, you cannot have a scenario where you go straight up in the air forever.

Furthermore, it is obvious that this area has been important in the past, so building up a little bit of momentum makes quite a bit of sense. I like the idea of buying a pullback over the next couple of days, as it is obvious that this area should continue to cause a bit of problems. However, once we get beyond that, the British pound will be free to go towards the ¥145 level.

GBP/JPY Video 14.01.21

I have no interest in shorting this market, because even if the ¥140 level did not offer support underneath, which I believe it will, the 50 day EMA is approaching that area rather rapidly, and I think it is only a matter of time before buyers would step back into the market in that general vicinity. After all, this is a market that has seen a lot of upward pressure in a very short amount of time, and therefore it is very likely that what we see is a simple rebuilding of the overall momentum to get involved. I have no interest in selling this pair and believe that it continues right along with the “risk on trade.”

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

GBP/JPY Price Forecast – British Pound Reaching Higher

The British pound has rallied significantly during the trading session on Tuesday as we have broken above the 141.62 level. At this point in time, it looks like we could go as high as 142.50 level, perhaps even to the 145 level over the longer term. All things being equal, this is a market that should continue to find buyers on dips, but it does not necessarily mean that we shoot straight up in the air. After all, the British pound has been very noisy due to the Brexit situation just being solved, and of course the nastiness of the lock down. With that being the case, I think it is only a matter of time before we would see value hunters coming in on dips, and I think that is essentially what is going to play out here.

GBP/JPY Video 13.01.21

Looking at the 140 level underneath I think should offer an excellent opportunity to get involved to the upside if we get a pullback, and I would look at that as a potential gift. That being said, I think that the market probably shows itself to prefer pullbacks in order to build up the necessary momentum to make a bigger move. That being said, it could be very noisy, but I have no interest in shorting this pair because quite frankly there is so much out there when it comes to the idea of the “reflation trade.” Because of this, I think we will continue to see people trade the overall “risk on attitude that a pair like this suggests. With that in mind, simply waiting for dips to pick up bits and pieces of value will continue to be the best way forward.

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

GBP/JPY Price Forecast – British Pound Pulls Back Again

The British pound has pulled back just a bit against the Japanese yen during Monday to kick off the week on the back foot. That being said, the market is likely to continue to see a lot of noise in general, especially as we are sitting near the ¥140 level. The ¥140 level of course would be a large, round, psychologically significant figure, and that of course will attract a certain amount of attention as well. That being said, I think that we could get below there, but I see plenty of support in various spots. The first spot would be the ¥139.50 level, followed very quickly by the red 50 day EMA on the chart which is currently sitting at roughly ¥139.

GBP/JPY Video 12.01.21

Beyond that, there most certainly is a major “risk on attitude” around the world when it comes to the reflation trade in, and that does tend to favor this pair going higher, despite the fact that the United Kingdom itself has a lot of internal headaches to deal with. Speaking of which, that may make the GBP/JPY pair lag other similar pairs such as the AUD/JPY pair, the CAD/JPY pair, and the NZD/JPY pair. Nonetheless, they should all move in the same general direction, which I think will be more of the “risk on” type of behavior that selling the Japanese yen typically suggests.

All things being equal, I think that you are looking to buy the dips, and I do believe that we will eventually go looking towards the ¥142.50 level, which was an area we had pulled back from previously. I have no interest in shorting this pair anytime soon.

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

GBP/JPY Weekly Price Forecast – Pressuring to The Upside

The British pound initially fell during the course of the week, breaking below the ¥140 level. By doing so, the market found quite a bit of value hunters down there again and has turned around to form a bit of a hammer shaped candlestick. This suggests that we are going to see a bit of a squeeze on the sellers, and ultimately try to break above the 200 week EMA. I think eventually this pair probably goes looking towards the ¥145 level, which is the next major round figure. However, that does not mean that it is going to be easy to get there, and therefore you should expect quite a bit of volatility from time to time.

GBP/JPY Video 11.01.20

With all of that being said, I like the idea of buying dips and I recognize that longer-term traders are trying to push this pair much higher, perhaps closer to more historic norms. The idea of the “reflation trade” bodes well for shorting the Japanese yen against most currencies, and this pair is most certainly a “risk on” type of market. Because of this, I would look at this as a market that should offer plenty of opportunities on the way up due to the fact that the UK economy is locked down, but most trader participants are starting to look past that scenario. If that is going to be the case, then it is very likely that we should see forward looking traders trying to push this pair much higher over the longer term.

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

GBP/JPY Price Forecast – British Pound Continues Grind Higher

The British pound has tried to rally a bit during the trading session on Friday, as the market continues to bang up against the ¥141.50 level, on its way towards ¥142.50 level. All things being equal, this is a market that I do think breaks out given enough time, but it is going to be noisy to say the least, especially as the British economy is locked down at the moment. Nonetheless, this is a “risk on” type of set up, and people will of course look at it as such.

GBP/JPY Video 11.01.2021

Market participants continue to see a lot of volatility going forward, but it should be noted that the “reflation trade” is the narrative at the moment, and therefore people will be looking to get involved in higher beta markets such as this one. Having said that, I do think that it is probably a better trade to be involved in something like AUD/JPY, simply because you can mitigate the issues with the United Kingdom. Nonetheless, I still think that this is a market buyers will come in and start picking up on dips, based upon value and an overall “fear of missing out” mentality. The 50 day EMA underneath offer support, and I think will be closely followed by traders.

Underneath that area we also have the 200 day EMA which is closer to the ¥137.50 level. I consider this to be the “floor in the market” at the moment, and I certainly would not be a seller until we break significantly below there. This has been a grind, but you can say that about the British pound against almost all currencies.

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

GBP/JPY Price Forecast – British Pound Continues to Power Higher

The British pound rallied significantly during the trading session on Thursday again, as it looks like we are trying to break out. That being said, there are a lot of concerns when it comes to the British pound, and of course the UK economy as the markets have to price and the idea of further lockdowns. However, they seem to be looking past the coronavirus situation because of the vaccine being available, and therefore we begin to focus on the idea of life after Brexit.

GBP/JPY Video 08.01.2021

There could be problems with the UK economy for sure, but the British pound is of course historically cheap at this point in time, and therefore it is likely that we continue to see this market try to rally given enough time. I think short-term pullbacks will continue to offer a certain amount of support near the 50 day EMA underneath as well, so there really is not a scenario in which a willing to sell this market.

Do not get me wrong, I do not necessarily think we go straight up in the air, but I do think it is more of a grind higher that we will continue to see. If we can break above the highs and go looking above, then the ¥142.50 level would be targeted, followed by the psychologically and structurally important ¥145 level. To the downside, it is not until we break down below the black 200 day EMA that I begin to worry about the overall trend.

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

GBP/JPY Price Forecast – British Pound Trying to Break 140

As I sit here and watch this pair, it has found the ¥140 level to be a bit of a magnet. Ultimately, I think this is a market that will continue to suffer at the hands of the latest rumor, Tweet, or whatever coming out of the United Kingdom as people are trying to price in the Apocalypse. I do understand that the United Kingdom is locking itself down but quite frankly it just depends on the day at this point in time as to whether or not we are focusing on the world after the vaccine, or if we are focusing on today. Unfortunately, this is the world we live in right now, so for newer traders I explicitly tell them to ignore the British pound and do not be bothered trading it.

GBP/JPY Video 07.01.2021

For those of us with a little bit more experience we recognize that the market is trying to break out to the upside, but it is going to be a very noisy and messy affair. The 50 day EMA underneath does offer a bit of support, but unfortunately when it comes to trading this pair you may have to have something like a 200 PIP stop to be comfortable. In other words, you have to keep your positions rather small. That being said, I do believe that this is the type of buildup that is suggesting we are going higher, and it should be noted that the British pound is historically cheap at these levels.

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

GBP/JPY Price Forecast – British Pound Sitting Just Below Major Level

The British pound went back and forth on Tuesday as we continue to dance just below the ¥140 level. This is an area that should continue to attract a certain amount of attention, and therefore it is only a matter of time before we have to make some type of decision. Quite frankly, there are a lot of concerns out there about the lock down in the United Kingdom, but it is obvious that we have not exactly broken apart at this point, so it does suggest that perhaps there is more resiliency here than meets the eye. The 50 day EMA underneath should offer support, and of course this is a market that has been trending higher over the longer term anyway.

GBP/JPY Video 06.01.2021

Keep in mind that this pair is highly sensitive to the risk appetite around the world, so that could be a push to the upside given enough time as well. That being said, the market is likely to see a lot of volatility, but overall, I do believe that it is only a matter of time before we go back towards the highs unless of course we get some major “risk off scenario” that we end up in. Pullbacks should be bought in general, as we have seen a tremendous amount of resiliency through the last several months. To the upside, the ¥142.50 level would be a target, eventually looking towards the ¥145 level. In general, this is a market that I do not see any reason to start shorting anytime soon, because quite frankly that has been a losing trade for a while.

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

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

The British pound initially shot higher during the trading session on Monday after gapping to the downside to kick off the new year. That being said, we have seen the market turn right back around and fall towards the ¥140 level, which of course is a large, round, psychologically significant figure, and an area where people had been paying attention to for some time. The British pound of course has to deal with the idea of more lockdowns coming, but this pair is also highly sensitive to risk appetite so it will be interesting to see which one of those factors takes over in the next few weeks.

GBP/JPY Video 05.01.2021

Now that Brexit is essentially over, or at least started to be finalized, it now looks as if the British pound will have to stand on its own merits, not just in the idea of a deal being signed. That should not bode well for the Pound against some currencies, but the fact that the Pound is rallying against the US dollar due to US stimulus, that could provide a little bit of a buffer to the downside against other currencies like the yen. This is further demonstrated by the fact that we are trying to form a shooting star of sorts, and that of course is a negative sign.

The 50 day EMA underneath should offer plenty of support, marked in red on the chart. I think we are simply trying to continue the overall upward channel more than anything else, meaning this will be more of a grind than an easy trade to the upside. As far as selling is concerned, I do not think this is the area to be thinking about it.

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

GBP/JPY Another Bounce is Possible

The GBP/JPY should make a bounce from the 88.6 zone as the price is still technically bullish

The POC zone for the GBP/JPY is exactly within 140.12-30. We should see an upmove which should be signalled if the price starts to reject from the zone. Targets are 141.42, 141.60 and 141.90. Only a drop below W L5 camarilla 139.38 could make the price bearish again.

2021-01-04 GBP/JPY

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

Cheers and safe trading,
Nenad

GBP/JPY Weekly Price Forecast – British Pound Sitting Above 140 JPY

The British pound has gone back and forth against the Japanese yen during the course of the week, as we are sitting above the ¥140 level. The ¥142.50 level above is probably going to be the short-term target, and it is worth noting that the 200 week EMA is sitting there as well. All things being equal, this does look like a market that is trying to pick up momentum to the upside, but it is very sensitive to risk appetite, so keep in mind that we will have to see how traders are feeling in general.

GBP/JPY Video 04.01.20

The biggest problem with this pair is not necessarily the idea of risk appetite, rather it is the problem that the British pound is tied to the British economy which of course is going to be a bit difficult to get a handle on as we have signed the Brexit deal now, but still have a lot of little bits and pieces to worry about. To the downside, I think that we will find plenty of support near the ¥137.50 level, where the 50 week EMA is and we have seen pretty significant structural support.

At this point in time, I think that we eventually do break out, but the British pound might be a bit of a laggard against the Japanese yen because of the entire trade deal and the coronavirus lockdowns in the country. As a general rule, I am bullish of this pair, but I would feel much more comfortable buying the Canadian dollar, New Zealand dollar, or even the Australian dollar against the Japanese yen. I have no interest in shorting this market anytime soon unless something drastic happens from a global macro risk standpoint.

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

GBP/JPY Price Forecast – British Pound Rallies Into New Year

The British pound rallied a bit during the trading session on Thursday, which of course was New Year’s Eve. That is the most important thing to think about during this day, the fact that volume in liquidity would have been rather thin. With that being the case, I think what we probably have hear more than anything else is a simple drift higher to follow right along with the general trend.

The 50 day EMA is tilting higher and offering support yet again underneath, so given enough time I think we will see a “buy on the dips” type of marketplace. With that being the case, I like the idea of buying dips because they do offer value and of course the British pound against the Japanese yen is highly sensitive to risk appetite. Despite the fact of everything going on around the world, there still seems to be a lot of risk-taking out there.

GBP/JPY Video 04.01.2021

To the upside, I believe that the ¥142.50 level would be the initial target, but it may take some work to get there. If we can break above that level, then we will probably go looking towards the ¥145 level. All things being equal, I do not have any interest in shorting this pair, but I do recognize that there will be a lot of concerns when it comes to the British economy due to lockdowns, and all of the minute details with the Brexit deal that was just signed. With this, I anticipate choppy but upward momentum, but I would also suggest that if you are looking to sell the Japanese yen, you may do better with higher flying currency such as the Australian dollar or New Zealand dollar.

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

GBP/JPY Price Forecast – British Pound Continues to Pressure Same Area

The British pound has rallied significantly during the trading session on Wednesday to reach towards the ¥140 level, an area that has been an issue previously. At this point in time, it is likely that we will continue to see people trying to break above there, mainly due to the fact that now Brexit is out of the way, we can start to focus on risk appetite. Yes, the area has been very difficult to break above, but I think given enough time we probably go looking towards the ¥142.50 level, perhaps even the ¥145 level after that.

GBP/JPY Video 31.12.20

I do recognize that there will be easier ways to play risk appetite, due to the fact that there are a lot of concerns when it comes to the United Kingdom and its economy, due to the fact that there is a drag on the growth of its economy with coronavirus-based lockdowns. That of course will wipe out some of the gains that the British pound could gain, but at this point in time I think what we are seeing is a lot of volatility due to a lack of volume, and I do believe that buying pullbacks will be the opportunity you are looking for, assuming that you get them.

The 50 day EMA underneath painted red on the chart could offer a significant amount of short-term support as well, as it is a widely followed technical indicator. All things being equal, I think that we do eventually go higher but if you are looking for more of a “risk on trade”, you may get more mileage going long another currency pair such as the AUD/JPY, NZD/JPY, and so on.

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