GBP/JPY forecast for the week of October 2, 2017, Technical Analysis

The British pound continues to grind away just above the 150 level against the Japanese yen as we have been gently ascending over the last several months. I believe that it’s only matter time before the buyers return, and you may have to look to short-term chart for buying opportunities based upon support at the 150 handle. Even if we break down below there, I think there is a significant amount of support at the 148.50 level as well, so dips should be buying opportunities. Given enough time, I think that the buyers will return, and longer-term I believe that we are going to go much higher. My next target would be the 155 handle, and then the 160 level. The impulsive candle from a couple of weeks ago should continue to serve as support and a lift for the market, as the Bank of Japan is light-years away from tightening monetary policy while the Bank of England looks likely to raise rates fairly soon.

Keep in mind that this pair is highly sensitive to risk appetite, so we get a sudden selloff in equities around the world, it can cause this market pullback. This is true with geopolitical concerns as well, but ultimately I think that the global growth story is starting to look reasonably good worldwide, and that should continue to push this market higher. It does tend to be volatile, but that’s one of the advantages of course, because when you’re right you end up making a lot of profit. Legging into a position was small incremental bids will probably be the best way to trade this market as it is very volatile and of course keeps you in the trade much longer, thereby being able to aim for the longer-term target.

GBP/JPY  Video 02.10.17