GBP/JPY Price Forecast – British Pound Trying to Break Out Against Yen

The British pound has rallied a bit against the Japanese yen, as we are heading into the holidays. Ultimately, this is a pair that is moving based upon Brexit more than anything else, so having said that there will be the occasional noise trade getting involved, as the headlines continue to go back and forth about fish. Having said that, it looks as if we are getting close to the end of the Brexit negotiations, so that should continue to send the British pound higher. At this point in time, we have broken through a major resistance barrier, so it is probably only a matter of time before we continue to go higher.

GBP/JPY Video 28.12.20

To the downside, I believe that the 50 day EMA continues offer support, but really at this point I do not think that we get some type of major selloff unless of course the details of the Brexit agreement turn out to be very negative for Great Britain. Longer-term, we most certainly could get a significant pullback but we will start to focus on actual economic data at this point more than anything else so you can make an argument for the market needing to “reset” now that we are getting past main driver of the British pound for the last several years.

There is an area between the 50 and the 200 day EMA indicators that should continue to offer plenty of support, but one has to wonder how much longer these lockdowns in the United Kingdom can go on before it starts to have a negative effect on the British pound?

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