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GBP/JPY Price forecast for the week of January 29, 2018, Technical Analysis

Christopher Lewis
Updated
The British pound initially tried to rally against the Japanese yen during the week, and even broke above the 155 handle. However, by the end of the week we formed a significant shooting star, showing serious trouble.

The British pound initially tried to rally during the week, breaking above the 155 handle. By forming a shooting star, it looks likely that we are going to roll over, and I think that the market will probably find plenty of weakness going forward. This is short-term though, as I see a significant amount of noise underneath. If we can break above the top of the shooting star, then I feel that the market probably goes to the 162 handle.

Part of the pullback has been due to the Bank of Japan suggesting that the Japanese economy is going to continue to strengthen, so therefore the Japanese yen rallied overall. However, the British pound has been very bullish, and I think that continues to be the case. If we get more of a “risk on” attitude around the world, that should help this market rally significantly. Otherwise, if we break down below the 150 handle I feel that this market will probably drop rather significantly. That’s getting ahead of ourselves, but it is the other side of the equation that you should be looking at. Expect the first couple days of the week to be somewhat negative, but ultimately, I think that the buyers will come back. I think the one thing you can count on is volatility, so be very small with your position initially. The market continues to be difficult to navigate, so by using a small position I think that you can ride out the massive amount of volatility that is typical of this market.

GBP/JPY Video 29.01.18

This article was originally posted on FX Empire

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