GBP/JPY forecast for the week of October 23, 2017, Technical Analysis
The GBP/JPY pair fell initially during the week, but found enough support near the 147.50 level to turn around and form an of buying pressure to eventually print a hammer for the week. The hammer sits just below the 150 level, and I believe that the market should continue to try to break out to the upside, and once we do slice through the 150 level, we could continue to go even higher. I think that clearing the 152 level is the next hurdle, but ultimately, I think that the longer-term buyers will come in and push even harder. The pair has been bullish for some time, and the 150 level is simply yet another barrier to overcome.
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If we did breakdown from here, I think that the 145 level should be massively supportive, as it is a large, round, psychologically significant number, and of course an area where we have seen action in the past. The market should continue to be rather choppy, but I think given enough time we will favor the upside as not only the Bank of England looks to raise interest rates, the Bank of Japan continues its very easy monetary policy. Ultimately, given enough time I think that we will reach towards the 160 handle, as it is the top of a massive cluster of noise on the weekly chart. Keep in mind that this market tends to coincide with risk appetite overall, and if the stock markets continue to rally, that should be good for the pair as well. At this point, I think the dips have to be thought of as buying opportunities for longer-term traders as we continue to see this market find its way to the upside. Selling isn’t a thought.