GBP/JPY Price forecast for the week of January 22, 2018, Technical Analysis
The British pound has rallied during the week, but turned around to form a bit of a shooting star. The shooting star looks negative, but at the same time we have a hammer underneath it shows a lot of positive strength. I believe that there is a “floor” in the market at the 150 handle, but I also believe that the upper proclivity of the market is well known. There’s a lot of noise above, so you will need to be able to deal with the volatility that will almost certainly become an issue. I think that the market should then go to the 163-handle longer-term, but it will take a lot of momentum and effort to get there. If you are a longer-term trader, you will need to deal with the noisy notice that is typical with “the Dragon.”
Your capital is at risk
If we broke down below the 150 handle, then the market probably goes down to the 147.50 level next. We have been in a grinding uptrend for well over a year, and I don’t know that it’s about to change. We have a lot of work to do in this area though, so the market will also need to do a lot of momentum building. That means we get the pullbacks. If we remain above the 150 handle, I think that it’s only a matter of time before a breakout, but take your time and forget about jumping in with both feet, because you should have plenty of opportunities to add to a core position if it’s winning.