GBP/JPY forecast for the week of August 7, 2017, Technical Analysis

The British pound initially tried to rally during the week but after the Bank of England on Thursday suggested that interest rate hikes are coming till 2018, this was very negative for the British pound overall and you can see that we ended up forming a shooting star. The British pound fell against the US dollars well, and that only added to the pressure. It looks as if we are going to try to break down, and a move below the 144 handle could move this market down to the 140.50 level after that. Based upon the shape of the candle, I think that the short-term move will certainly be to the downside and of course that rallies will probably sell off. If we did break above the top of the candle for the week, that should be a bullish sign, perhaps reaching towards the 148.50 level.

Slumping

Ultimately, this looks like a market that is slumping a bit, and I think that the proclivity of the market probably will be to go to the downside. The market has been trying to grind higher, but you can also make an argument for a rising wedge as well. That’s a negative sign as well, so I believe that the market is probably going to be soft over the next several weeks. Remember, the GBP/JPY pair is highly sensitive to overall risk appetite, so pay attention to commodity markets and stock markets around the world as well.

GBP/JPY  Video 07.8.17