GBP/JPY Price Forecast – British Pound Pulls Back From Overbought Condition

The British pound has initially tried to rally during the course of the trading session on Friday, but then pulled back to show signs of negativity for the short term, but at the end of the day we may be overbought more than anything else. With this being the case, the market is likely to see a lot of buyers underneath, and it should be noted that the most recent high was higher than the one before. At one point, it looks like we were starting to run out of momentum and that we could break back down, but now that we have cleared the previous I, it looks more like a volatility consolidation more than anything else.

GBP/JPY Video 03.05.21

With that being said, I believe that the ¥150 level continues to be very important, with the 50 day EMA reaching towards that level. On the other hand, if we break above the top of the candlestick from the Thursday session, it opens up a move towards the highs again. The British pound against the Japanese yen is a market that tends to measure risk appetite, so perhaps there is a little bit of profit-taking heading into the end of the month, as money managers will have to present gains to their clients. Nonetheless, I do like this pair and I think that once we get a supportive looking candlestick, I will probably get long again to reach towards the ¥153.50 level. After that, it opens up a move to the ¥155 level above which is psychologically important as well as structurally.

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