GBP/JPY forecast for the week of September 25, 2017, Technical Analysis

The British pound tried to rally against the Japanese yen during most of the week, but failed towards the end of the week. Because of this, we knew forming a shooting star that sits just above the 150 handle. I believe if we break below the 150 handle, that signifies that we are about to get a pullback. The pullback is necessary to continue the upward momentum, but I think most of the influence in this pair is probably going to come from another market, the GBP/USD pair. This is because the British pound is testing the gap from the leave vote coming out of the United Kingdom, and therefore I think that we are about to see some exhaustion selling in the British pound overall.

I do believe that given enough time the buyers will return, probably closer to the 147 handle, but I also recognize that if we break above the top of the shooting star for the week, that’s a very bullish sign and should send this market looking for the 160 handle. I don’t have any interest in trying to hang onto a sell position, I believe the longer-term attitude is probably to the upside, especially if we can find positivity in the stock markets and commodity markets around the world. This pair does tend to be very sensitive to risk appetite, which could get a bit of a blow this week due to increasing tensions between the United States and North Korea again. Ultimately, I am bullish of this pair, but this break may be necessary for us to continue the uptrend. The impulsive candle from the previous week should continue to offer a certain amount of psychological pressure to the upside longer-term, and I think eventually it will provide too much for the sellers.

GBP/JPY  Video 25.9.17