GBP/JPY forecast for the week of August 14, 2017, Technical Analysis

The British pound fell against the Japanese yen during the majority of the week, reaching towards the 141 handle. Ultimately, this is a market that is very sensitive to risk appetite, and with the global tensions ratcheting out between the United States and North Korea, I believe that there was a bit of a safety bid in the market. However, I suspect that the buyers are coming close to getting involved again. When you look at the longer-term chart, there is an obvious resistance barrier at the 148.50 handle, and an obvious uptrend line that we are currently trying to test. If we can stay above the 140 handle, I think it’s only a matter of time before the buyers get involved. If they do get involved in that area, I would anticipate a move back to the 148.50 level again.

The influence of the GBP/USD pair.

Remember, there is going to be a bit of influence from the GBP/USD pair, as it is the benchmark of British pound strength. There are lot of issues influencing where the British pound is going, as the United Kingdom continues to discuss leaving the European Union. I think that if the market can continue to find buyers, this market will eventually find support as well. Also, if the noise between the United States and Korea settles down, that should be enough to have traders coming in to pick up a little bit of risk. Either way, I expect a lot of volatility and I would anticipate that it’s probably best to use smaller positions over the next several sessions as we could get sudden turnarounds in the market based upon headlines coming out 24 hours a day. If we do finally break above the 140.50 level, the market should then go much higher.

GBP/JPY  Video 14.8.17