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GBP/JPY Price forecast for the week of February 12, 2018, Technical Analysis

By:
Christopher Lewis
Updated: Feb 10, 2018, 06:02 UTC

The British pound has been pummeled during the week, especially on Friday. This was in reaction to a common coming out of a British negotiator with the European Union that they were still willing to walk away from a trade deal. Posturing or not, this pair had already been somewhat negative. Because of this, I think we may see a little bit more negativity, as we have now broken the back of the previous week.

GBP/JPY weekly chart, February 12, 2018

The British pound has broken down against the Japanese yen during the week, slicing down towards the 150 handle on Friday. As I record this, it looks as if the 150 level is trying to offer support, but it would not surprise me to see this market break down below there, based upon the ferocity of the move. If we do break down below there, I think there is quite a bit of support down to about 147.50, so it’s only a matter of time before value hunters reenter the market.

Keep in mind that there has been a lot of negativity in the stock market this past week, which is very negative for risk appetite driven assets such as this pair. Also, this was a bit of a knee-jerk reaction to what should be posturing at best. In the end, there’s a lot of noise above so it makes sense that the market pulled back as it will take a lot of work to break above the 163 level. Once we do, this pair will recapture the losses from the last couple of years. In fact, this could be one of the best trades for the longer-term career minded trader, but obviously we need to see some type of support to start thinking about going long again. It is not until we break down below the 145 level that I would be concerned about the uptrend.

GBP/JPY  Video 12.02.18

About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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