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.

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