GBP/JPY Price Forecast – British pound finding support

The British pound pulled back initially during the day on Friday, but then turned enough momentum to the upside to show signs of life again. When I look at this candlestick, not only do I see hammer but I also see the potential of a bullish flag. The bullish flag of course is very common for technical analysis practitioners, so therefore a lot of people will be paying attention to this. I think if we can break above the top of the bullish flag, we could go much higher. And to be honest it makes a lot of sense that we would see it here. After all, there are a lot of headlines out there about the Brexit, and the closer we get to some type of compromise, the more likely we are to see the British pound rally.

GBP/JPY  Video 18.02.19

On pullbacks, I’m looking for short-term buying opportunities and I think that the ¥140 level is of course a massive support level based upon previous clustering, and of course the reversal of the yen “flash crash” that we had seen previously. With that in mind, I think that buying dips continues to work and that eventually we will break towards the upside. That upside of course will have a lot to deal with as far as headline risk is concerned, and of course the 200 day EMA which kicked the market back down. However, “V-shaped recoveries” tend to be very strong signals to say the least.

Please let us know what you think in the comments below

This article was originally posted on FX Empire

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