GBP/JPY forecast for the week of July 24, 2017, Technical Analysis

The British pound fell significantly against the Japanese yen during the week, slicing through the 145 handle on Friday. We break down below the bottom of the hammer from the previous week as well, and this suggests that perhaps we are starting to see a failure of the attempt to go higher. However, I think that the market is trying to form some type of ascending triangle, and that of course is a bullish sign. Because of this, I think you will see a lot of volatility in this market as is typical anyway, and I think you should pay attention to the uptrend line just below. I think we will go looking for it, which is probably closer to the 142 handle at present.

Watch risk appetite

Keep in mind that this pair is highly sensitive the risk appetite, so if we see a lot of selling in the global equity markets or commodity markets, that could turn this market around and present much lower. Ultimately, the British pound is being held hostage to the negotiations with the European Union, so those headlines could come in to cause problems as well. Alternately, if we break above the 148.50 level, the market could go much higher as it would be a very bullish sign and send this market looking towards the 150-level next. Either way, this is going to be a very noisy pair, but I think that both buyers and sellers will probably get what they want over the next several weeks. Given enough time, I think that this market will eventually break out to the upside, but there is a lot of noise to be had between now and then. I think that the uptrend line from the bottom of the triangle will be a very interesting place to start buying based upon value.

GBP/JPY  Video 24.7.17