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GBP/JPY Weekly Price Forecast – British pound looking for stability

The British pound fell rather hard during the week, reaching down towards the ¥135 level before bouncing slightly. However, we have broken the back of a couple of hammers on the weekly chart and that does suggest certain things.

The British pound has fallen rather hard during the week against the Japanese yen and broke down below the bottom of a couple of hammers on the weekly chart. That is a very negative sign, but the ¥135 level has in fact held. That would be your last vestiges of support, and if we break down below that level it’s very likely that we go lower. At that point I would anticipate that the market probably goes down to the ¥131.50 level, as it is an area that offered major support in the past.

GBP/JPY  Video 08.07.19

To the upside I see the ¥138 level as a major resistance barrier, the probably extends to the ¥138.50 level. A break above that level will more than likely send this market towards the ¥140 level in a bit of a “risk on” move. Keep in mind that the Japanese yen is considered to be a major safety currency, so don’t be surprised at all to see a get sold off if we get good news. This will be exacerbated either by stock markets, central bank liquidity measures, or perhaps the US/China trade situation getting better. That being said, if it becomes worse, then the exact opposite should then occur. If that happens, it will more than likely be very exacerbated, and much quicker. Ultimately, this is a market that looks like it’s trying to form a base, but it could take some time to happen as these things generally a big deal. Expect volatility in the short term though.

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This article was originally posted on FX Empire

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