GBP/JPY Price Forecast – risk off move drives pair lower

The British pound fell against the Japanese yen during trading on Monday to start the week, as we have started out with a “risk off” move. Overall, the market has seen a significant rally as of late, but as we continue to worry about tariffs, this continues to weigh upon anything relating to risk appetite. · FX Empire

Christopher Lewis

Updated Mon, Jul 2, 2018, 10:12 PM

The British pound fell significantly to start out the week against the Japanese yen, and a bit of a “risk off” move. Because of this, it’s likely that we will continue to see a lot of volatility in the marketplace, as we worry about trade tariffs and the looming deadline on Friday for the Americans to slap the Chinese with trade tariffs. It’s expected that almost immediately the Chinese will retaliate, so this could be the market trying to get ahead of that event.

With this, there was a previous uptrend line that could cause a bit of support that coincides nicely with the 145 handle, but I think it is minor support at best as it has been broken through a couple of times. Overall, I anticipate that this market will continue to drive lower over the next couple of days, but even if it doesn’t, the one thing I think you can count on is extreme amounts of volatility. The market continues to be very noisy based upon headlines and of course fear, which is always volatility inducing.

If there were some signs of reconciliation between the United States and China, that might be reason enough for traders to turn around and buy this market, but quite frankly I don’t see that happening, as I believe that much of the trading public has found itself resigned to an increase in tensions.