GBP/JPY Price forecast for the week of March 26, 2018, Technical Analysis

The British pound against the Japanese yen is an interesting currency pair, because it reflects the risk appetite of traders around the world. However, this past week we have somewhat ignored a lot of the fears of a trade war and rallied anyway. The 150 level has been important in the past, and the fact that we touched that this week is a sign that there is some underlying strength. However, we did pull back in that shows that there are still plenty of sellers in that region. The uptrend line that offered resistance yet again is a potential barriers well, so at this point I think we will need to see whether we break above or below the weekly candle. I think that is the signal, and it’s essentially a binary trade.

GBP/JPY  Video 26.03.18

If we break above the 150 handle, then I think we go looking towards the 155 level again, as it would not only be a break of significant resistance from a psychological standpoint, it also the top of a long wicks, which of course is the same thing. Alternately, if we break down below the bottom of the candle stick, that is negative, and would send this market looking towards the recent lows, and then perhaps even the 140 handle. That would confirm that the previous uptrend line is now resistance and would accelerate some type of breakdown in this market, perhaps in reaction to some type of headline coming out of the trade war discussions.