GBP/JPY Price Forecast – British pound pummels Japanese yen for Tuesday session

The British pound exploded to the upside against the Japanese yen during the Tuesday session after the Bank of Japan had its announcements. The Japanese yen was weaker across the board, so it makes sense that “The Dragon” took off to the upside as well. · FX Empire

Christopher Lewis

Updated Tue, Jul 31, 2018, 10:40 PM

The British pound has broken higher during the trading session on Tuesday, clearing the ¥146.50 level. We are testing significant resistance as I record this market, and a pullback would make sense as we had gotten a bit overbought, especially considering that the Bank of England has a crucial announcement on Thursday as to interest rates. I believe that we may get a little bit of a pullback due to traders not wanting to hang on to the trade that long. However, if we were to continue to go higher, specifically break above the ¥147 level, then I think the market will have put that end its rearview mirror and simply continue to go higher. At this point, I have no interest in shorting this market, even though I would fully anticipate a pullback.

Keep in mind that this pair is highly sensitive to global risk appetite, so if stock markets do well, typically this pair will also. It’s also going to be highly sensitive to headlines events, so news could push this pair around as well. Beyond that, we also have the Brexit coming, and of course all of the noise that goes along with that. I believe we do go higher, but again I also think that we need to see a bit of value reintroduced into the market before a lot of traders would be willing to try to pick this pair. To the downside, I see the ¥145.25 level as being very supportive.