GBP/JPY Price Forecast August 2, 2017, Technical Analysis

The GBP/JPY pair initially went sideways on Tuesday, but then shot towards the 146 level. Within pullback as the Americans came back to work on Wall Street, but are starting to stabilize. Ultimately, this market looks as if it should continue to grind its way to the upside and therefore I am bullish. However, I recognize that the pair is highly susceptible to random noise as the United Kingdom is leaving the European Union and it will of course cause significant headlines to cross the wires from time to time. Ultimately, I believe that the market should then go much higher. However, we could get sudden pullbacks as we saw during the session on Tuesday, as Americans became very defensive.

The knock-on effect of the USD/JPY pair.

The knock-on effect of the USD/JPY pair has a lot to do with what happens here. As the USD/JPY pair is testing the 110 handle, it makes sense that a breakdown below there could trigger more yen buying, and that could send this market lower. I believe that the “floor” is closer to the 145 handle, so as long as we can stay above there I’m a buyer. I believe that the market is trying to find its footing, and quite frankly algorithmic trading seems to be willing to buy pullbacks and risk assets lately, and that should continue to be the case here as well.

GBP/JPY  Video 02.8.17