GBP/JPY Price Forecast – British Pound Explodes to Upside Against Yen

The British pound has exploded to the upside during the trading session on Monday due to word that Pfizer has a vaccine that has 90% efficacy against the coronavirus, which of course will cause a lot of momentum in the “risk on” type of situation. With that being said, the implied volatility of the markets in general should continue to favor bigger moves like this in the short term. However, at best say vaccine is at least three months away, so that means that we will more than likely see this find some type of trouble.

GBP/JPY Video 10.11.20

Another thing that makes this pair particularly difficult to trade is the fact that we have the Brexit to deal with. Yes, the news is good in the short term and of course the Japanese yen got hammered as a result. However, one would have to think it is only a matter of time before Brexit starts to show itself again, which of course could cause major issues. Looking at this chart, it is obvious that the ¥140 level above will be a target if we can continue to go higher, but also it is a large, round, psychologically significant figure, and an area where we have seen a lot of selling in the past. With that being the case, I think that it makes quite a bit of sense that we would see a bit of a significant barrier.

To the downside, the ¥135 level remains a massive support level, but it is difficult to imagine how we get down there without some type of noise coming out about Brexit, which of course will start to work its way to the forefront rather soon.

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