GBP/JPY Price Forecast – British pound pulls back on Wednesday

The British pound pulled back a bit during the trading session on Wednesday, reaching back towards the gap that formed at the open for the week. I think there is a significant amount of support extending down to the ¥146.50 level, so I think we are looking at a potential buying opportunity. However, if we break down to a fresh, new low then I think it’s obvious that we will probably drop down to the ¥145 level. This pair is highly sensitive to the Brexit and the noisy headlines that keep coming out, but one thing that I have noticed is that the British pound seems to recover quite stringently after one of those massive selloff.

This pair is also very sensitive to overall risk appetite, so keep that in mind. If stock markets sell off rather drastically, that could put bearish pressure on this pair, as people will run to the relative safety of the Japanese yen. If we do break down below here, the ¥145 level should be very interesting as it is a large, round, psychologically significant figure. Below there, the ¥142.50 level is also important. We had previously been consolidating from roughly this range to the ¥149.50 level. It would not surprise me to see a bounce in a reentry of that sideways action as we await what happens with the Brexit. Regardless of what happens, I would be cautious about my position size as this pair can hurt you if you’re wrong.

GBP/JPY  Video 18.10.18

This article was originally posted on FX Empire

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