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MARKETS LIVE BLOG:

STOCKS TRADE HIGHER; DISNEY SINKS AFTER EARNINGS

Disney's surprise streaming entertainment profit offset by weaker TV business

GBP/JPY Price forecast for the week of February 5, 2018, Technical Analysis

Christopher Lewis
Updated
The British pound initially fell against the Japanese yen during the week but found enough buying pressure to turn things around and form a very bullish looking candle. In fact, we have broken above the top of a shooting star from the previous week, so that’s a very good sign as well. Closing above the 155 doesn’t hurt either.

The British pound initially fell during the week, testing the hammer from a couple of weeks ago. We turned around to rally and break above the 155 handle, which is the large, round, psychologically important barrier that caused a so much trouble last week. It looks like we are ready to continue going higher, and by breaking above the top of that shooting star, it shows that there is a underlying pressure in this market. I think we will eventually go looking towards the 163 handle, but I believe that short-term pullbacks may occur occasionally. However, I look at those as value, as the Japanese yen looks a bit susceptible to pressure at this point.

Keep in mind that this pair is highly sensitive to risk, so of course is stock markets start to rally, people are willing to short the Japanese yen, meaning by the British pound. Beyond that, the British pound itself looks relatively strong, so I think that it is a bit of a “double whammy” for buyers to come in and break out to the upside. Ultimately, the consolidation area above will cause a lot of noise, but I think we get to the top of it which again, is the 163 handle. I don’t have any interest in selling this market currently but will keep you advised as my analysis evolves.

GBP/JPY Video 05.02.18

This article was originally posted on FX Empire

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