GBP/JPY Price Forecast – British pound spikes due to false headlineThe British pound spiked tired due to a false headline coming across twitter that the British had decided to compromise on the Irish border. Nonetheless, this is a market that was already trying to break out of a triangle anyway, so therefore I think it’s a bit of a moot point.
This pair continues to be very noisy but it certainly looks as if it has an upward proclivity currently. This bike that you see on the hourly chart was due to a twitter headline that was false, but I believe we were trying to break out to begin with, so it only sped up what could have been the inevitable. I do recognize that we have a lot of noise above, and in particular near the ¥150 level, an area that should be psychologically important to say the least. With that in mind, I believe that we are looking at an opportunity to buy the dips, but you should also be very cautious. I would make sure that you had reasonable stop loss is in place, especially near the ¥148 level, which I see as a “must hold.”
If we were to break down below that level, I think we could go to the ¥147.50 level rather quickly. I recognize that the ¥150 level is going to be difficult to break above, but once we do it should freeze the market to go much higher. This is a market that should continue to be driven by Sino-American relations and of course the Brexit, so keep that in mind. In other words, headlines are going to come along and slam the market occasionally. This is why having stop loss is in place is absolutely crucial when it comes to trading “The Dragon.”