GBP/JPY Price Forecast – British Pound Continues Grind Higher

　　The British pound has tried to rally a bit during the trading session on Friday, as the market continues to bang up against the ¥141.50 level, on its way towards ¥142.50 level. All things being equal, this is a market that I do think breaks out given enough time, but it is going to be noisy to say the least, especially as the British economy is locked down at the moment. Nonetheless, this is a “risk on” type of set up, and people will of course look at it as such.

　　GBP/JPY

　　Market participants continue to see a lot of volatility going forward, but it should be noted that the “reflation trade” is the narrative at the moment, and therefore people will be looking to get involved in higher beta markets such as this one. Having said that, I do think that it is probably a better trade to be involved in something like AUD/JPY, simply because you can mitigate the issues with the United Kingdom. Nonetheless, I still think that this is a market buyers will come in and start picking up on dips, based upon value and an overall “fear of missing out” mentality. The 50 day EMA underneath offer support, and I think will be closely followed by traders.

　　Underneath that area we also have the 200 day EMA which is closer to the ¥137.50 level. I consider this to be the “floor in the market” at the moment, and I certainly would not be a seller until we break significantly below there. This has been a grind, but you can say that about the British pound against almost all currencies.