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GBP/JPY Price Forecast – British pound heading towards resistance

By:
Christopher Lewis
Updated: Dec 13, 2018, 15:39 UTC

The British pound has rallied a bit during the trading session on Thursday, but as you can see marked on the chart, I have a yellow circle suggesting where the sellers will probably come in and start jumping on this pair again.

GBP/JPY daily chart, December 14, 2018

The British pound has rallied a bit during the trading session on Thursday reaching towards the ¥144 level. However, we have given back a little bit of the gains early in the day, as it looks like there is still going to be a bit of a “risk off” situation. I think at this point, it’s likely that the downtrend should continue, because even though we have had a confidence victory by Teresa May, the reality is we now have all of the previous Brexit issues on the table. Beyond that, the European Union has already suggested it’s not willing to renegotiate, so essentially the British are stuck with what’s in front of them.

GBP/JPY  Video 14.12.18

At this point, the 200 day EMA above is starting to turn down, and of course the ¥145 level is crucial. If we were to break above those two things, then we will probably go looking towards the top of the descending channel that we have been in for some time. However, I think it’s much more likely that we will see signs of exhaustion between now and then, offering a nice selling opportunity for a move back down towards the ¥141 level. In general, I believe that fading rallies will continue to be the best way to trade this market as it is ready to fall apart at the first signs of bad news, not only in the United Kingdom but with the trade negotiations between the United States and China, as it is sensitive to the global markets in general.

About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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