GBP/JPY continues to look soft, even in thin trading on Friday

The GBP/JPY pair tried to rally initially during the trading session on Friday but found too much in the way of resistance at the 149.40 level. By rolling over the way it did, I suspect that the market is going to continue to struggle a bit, and one thing that I would point out is that the weekly chart shows a couple of shooting stars in a row. That is a very negative sign, and I think that if we break down below the 148.75 level, the market could online rather rapidly. This would almost certainly have something to do with the trade war talk around the world, and I think that market participants will be especially sensitive to any rhetoric coming out of both the United States and China.

There is an uptrend line just above, intersecting with the 150 handle, an area that is major and will be very instrumental as to where we go next. I suspect that if the market participants push the market above there, then we could rally quite drastically, probably based upon good news coming out of the trade war talks. I suspect that the slightest hint of escalation will probably send this market lower, perhaps reaching towards the 145-level next. Market participants continue to be very jittery, and therefore I think caution is probably the better part of valor when it comes to trading this pair. I would use small positions.