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GBP/JPY forecast for the week of October 9, 2017, Technical Analysis

Christopher Lewis
Updated

The GBP/JPY pair broke down significantly during the week, slicing through the 150 handle. Not only that, we continue to break down below the 140.50 level, and that is a very negative sign. I think that the market is probably going to continue to go down to the 145-handle underneath, and that’s an area that we should see support. I believe that a couple of weeks’ worth of negativity should continue. Keep in mind that the Teresa May government should continue to cause issues with the British pound, and of course if there’s any abatement of risk appetite, that should send this market lower as well. If we can find some type of support at the 145 handle, it’s likely that we would turn around and reach towards the 148.50 level again, and then possibly the 150 handle. A break above there would be a continuation of the longer-term uptrend.

Pay attention to risk appetite overall, and what I mean by that is of course stock markets and commodity markets. I think that this will be more of a “2 speed market”, so depending on your time horizon, could dictate how you trade the market. If we were to break down below the 145 handle, that would be very negative and probably make this market somewhat collapse. I do like the market though, but we have a couple of weeks’ worth of negativity to work through, and that of course is an opportunity to trade to the downside from the short-term, while being patient enough to wait for a longer-term buying opportunity. The volatility should continue, so keep that in mind and keep your trading position somewhat smaller than usual to help protect your trading account against wild swings.

GBP/JPY Video 09.10.17

This article was originally posted on FX Empire

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