GBP/JPY Price forecast for the week of January 15, 2018, Technical Analysis

The British pound initially fell during the week, but found enough support at the 150 level to turn around and form a massive hammer. The hammer is of course a very bullish sign, and I think that if we can break above the top of the candle, we should then go to the 160-handle next. This market tends to be extraordinarily volatile, but it appears that the British pound is very bullish in general, as seen against the US dollar for example. The rising stock markets around the world should continue to help this pair as well, as it tends to be very sensitive to risk appetite. Ultimately, I believe that this market will not only reach the 160 handle, but go much higher. It’s not until we break down below the 148 level that I would be concerned about this market, and I believe that the market participants are looking to pick up dips as value, as global growth continues to accelerate.

If we were to break down below the 150 handle, and more importantly the 148 handle, then I think we go to the 145-level underneath which of course is even more supportive based upon the previous action. I still believe that this market goes higher over the longer term, so I am very bullish of this pair and think it could be one of the better stories of 2018. Expect volatility, but that will be nothing new to anyone who’s traded this pair before.

GBP/JPY  Video 15.01.18