GBP/JPY Price forecast for the week of February 12, 2018, Technical Analysis
The British pound has broken down against the Japanese yen during the week, slicing down towards the 150 handle on Friday. As I record this, it looks as if the 150 level is trying to offer support, but it would not surprise me to see this market break down below there, based upon the ferocity of the move. If we do break down below there, I think there is quite a bit of support down to about 147.50, so it’s only a matter of time before value hunters reenter the market.
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Keep in mind that there has been a lot of negativity in the stock market this past week, which is very negative for risk appetite driven assets such as this pair. Also, this was a bit of a knee-jerk reaction to what should be posturing at best. In the end, there’s a lot of noise above so it makes sense that the market pulled back as it will take a lot of work to break above the 163 level. Once we do, this pair will recapture the losses from the last couple of years. In fact, this could be one of the best trades for the longer-term career minded trader, but obviously we need to see some type of support to start thinking about going long again. It is not until we break down below the 145 level that I would be concerned about the uptrend.