GBP/JPY Price forecast for the week of November 6, 2017, Technical Analysis

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As the British pound rallied initially against the Japanese yen during the week, it looked as if we were trying to break out for a significant move higher. However, after Mark Carney suggested that the interest rate hike that we got out of the Bank of England this week was going to be followed very … Continue reading GBP/JPY Price forecast for the week of November 6, 2017, Technical Analysis · FX Empire

Christopher Lewis

Updated Fri, Nov 3, 2017, 11:18 PM

As the British pound rallied initially against the Japanese yen during the week, it looked as if we were trying to break out for a significant move higher. However, after Mark Carney suggested that the interest rate hike that we got out of the Bank of England this week was going to be followed very cautiously, this had the British pound selling off overall. You can see a shooting star that has formed on the weekly chart, and it looks as if we could be getting ready to roll over a bit. I think the 145-level underneath should be supportive though, so looking for a bounce from there or a supportive candle might be a nice buying opportunity, but I would be very cautious at this point until we get some type of confirmation.

If we were to break out to a fresh, new high, then I’m willing to buy this pair again, as it would show that we are going to go looking towards the 160 handle above, perhaps even the 165 level. If we were to break down, I think the 145 level being broken to the downside could signify that the market is to go even lower, perhaps even as low as the 135 handle. Remember that this pair is very sensitive to risk appetite, so if stock markets around the world start selloff, that should put even more pressure on this market to the downside, giving us an opportunity to make money shorting and running to the relative safety of the Japanese yen. Obviously, the exact opposite can be true as well, so if the stock markets can signify that there is more risk on going forward, this pair should rally quite stringently.