GBP/JPY Price Forecast – flash crash send yen soaring against pound

It is quite possible that what we had seen during Asian trading was a simple flash crash triggered by comments by Apple’s Tim Cook that most of the problems the company was having right now is due to a slowing in China and married along with low liquidity could have caused a lot of algorithmic trading. However, what is most important is that we have blown through major stop losses in all of the yen related pairs. In this pair, we have broken through the bottom of the descending channel, which of course is a very negative sign, and have bounced quite nicely since then. That bounce should offer a selling opportunity though, and I think now the ceiling will probably be close to the ¥140 level.

GBP/JPY  Video 04.01.19

Beyond that, let us not forget that we have issues with the Brexit, and that of course makes this pair a bit unique as there are so many headlines coming out of the United Kingdom and the European Union that can move the market. In a situation where we have a lot of concerns about global growth which normally weighs upon this pair and the fact that we have a lot of uncertainty when it comes to the United Kingdom moving away from the EU, makes this a bit of a “perfect storm” for Forex traders, and therefore I think that rallies are going to continue to offer selling opportunities at the first signs of exhaustion or trouble.