GBP/JPY Price Forecast – British Pound Stalling Against Japanese Yen?

The British pound has rallied significantly against the Japanese yen during the last several sessions, but over the last 36 hours or so we have seen the market stall. This makes sense, because quite frankly you cannot have a pair go in one direction forever. Eventually, gravity comes into play and perhaps that is what we are starting to see. The 200 day EMA of course is an indicator that a lot of longer-term traders will pay attention to, so it is worth noting as well.

GBP/JPY Video 05.06.20

The pullback probably will find buyers near the ¥135 level, an area that was an obvious break out point previously. Because of that, it is likely that we will see this market continue to be very noisy, but a pullback is probably one of the healthier things that could happen. At the very least, there is a lot of risk out there and that could work against this pair anyway. However, even if we were to remain very bullish, the reality is that the market needs to pullback in order to pick up more momentum.

Shooting straight up in the air is not healthy, and normally ends in tears if not corrected along the way occasionally. With that in mind, I suspect that a break down below the lows of the Wednesday candlestick could send this market looking towards the ¥135 handle, where then we could reset. However, if we break above the Wednesday candle, then it is likely that we start racing in what could be thought of more or less as a “blow off top.”

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