GBP/JPY Price Forecast – British Pound Continues to Face Same Headwinds

The British pound has rallied against the Japanese yen during the trading session on Tuesday again, showing some significant amounts of resilience. Having said that, the British pound has a massive amount of resistance just above at the ¥136 level, an area that we had seen a lot of downward pressure at a couple of weeks ago. Furthermore, the 200 day EMA is just above and that will attract a certain amount of algorithmic trading as well.

GBP/JPY Video 30.09.20

To the downside, the ¥135 level obviously will attract a certain amount of attention, but we have sliced through it twice in the last couple of weeks, so I think it only has a certain amount of importance. All things being equal, there is also the 50 day EMA getting ready to cross below the 200 day EMA, the so-called “death cross.” While I do not describe this as a significant technical indicator, it does cause a certain amount of psychological damage to the idea of an uptrend, but you can also look at the previous “golden cross”, and see how you would have lost money taking that signal.

Because of this, I tend to ignore the signal, but I know others do pay attention to it. With that being the case, I think that it is only a matter of time before a certain amount of selling pressure comes back into play. However, if we were to break above the ¥137 level, then I think we could go much higher. Until then, I think that you continue to look to fade rallies.

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