GBP/JPY Forecast July 17, 2017, Technical Analysis
The British pound initially fell during the session on Friday, but then turned around at sliced through several layers of resistance as the British pound eventually managed to break out against the US dollar. By extension, this market rallied, and now looks set to take on the 147.50 resistance barrier above. As I write this, we are pulling back, but quite frankly that should not be a major surprise as the market got a bit overextended. Because of this, I think the market will eventually try to find some type of support, and I anticipate it should be somewhere closer to the 146.75 level. Eventually, I believe the market will break out to the upside, but this volatility is what you can expect in this pair at all times, not to mention now when economic situations are changing so rapidly.
Risk on/risk off
Remember that this is considered to be a “risk on/risk off” payer, meaning that if market participants are willing to pick up a little bit of risk, this pair does well. Alternately, if they are 9, it tends to fall apart. It appears that the British pound is starting to be favored overall, so that of course should lead to much higher pricing against the lowly Japanese yen. Given enough time, I think we break out and reach towards the 150 handle which is my longer-term target. That’s not to say that it will be easy, but I believe in buying on the dips in the meantime, as it is probably the only thing that is feasible after this type of impulsivity.
This article was originally posted on FX Empire