GBP/JPY Forecast August 8, 2017, Technical Analysis

The British pound continues to struggle overall, as we are grinding sideways in a relatively tight consolidation area. After the recent selloff, we are starting to see some signs of stability, and then of course is good. We are just below the 145 level on the longer-term charts, which of course signifies a relatively large, round, psychologically significant number. However, it looks as if the 144 level is offering support for the short-term traders. Because of this, I believe that we will continue to see a bit of grinding, but a breakdown below the 144 level does send this market much lower.

Waiting for impulsive candles

As we have recently seen such volatility, it is not uncommon for the market to grind for a while as we digest either gains or losses. I believe that’s what we are doing now but if we can get an impulsive candle that breaks down below the 144 handle, I would be more than willing to start selling again. Alternately, if we can break above the 145 handle, I believe that would send this market looking to wipe out the recent losses, and perhaps reach towards the 146.50 level above, that has been resistive recently. Either way, you have to be cognizant of the fact that there is going to be a lot of headline risk due to the negotiations between the United Kingdom and the European Union involving their dissolution. In the meantime, I expect short-term back and forth trading, so those of you who prefer to scalp charts may find this a market worth dealing with. For swing traders, it will be difficult until we get some type of obvious momentum. The last couple of days have shown a nice range of about 80 pips to work with.

GBP/JPY  Video 08.8.17