GBP/JPY Price forecast for the week of December 4, 2017, Technical Analysis
The GBP/JPY pair has been very noisy over the last couple of weeks, as we continue to dance around the 150 handle. This shows just how important the level is, and if we can break above the shooting star from a couple of months back, then I think we are free to go much higher. However, when you look back to spring of 2016, the market is consolidating just above this area, so I would expect to see a lot of noise and potential resistance. Keep in mind that this pair does tend to be rather risk sensitive, and a bombshell came out on Friday that General Flynn in the United States was talking about testifying against the White House in the Russian voting scandal. Quite frankly, I think this throws a bit of a monkey wrench into any stability, although there is in a foregone conclusion as to where that goes.
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Because of this, I believe that following the technical signals is probably the only thing you can do, with a break above that shooting star tension previously being a buy signal, but if we break down below the low of the week, we could find the market reaching towards the 145 handle, and then eventually the 140 level. Pay attention the stock markets, if they crumble, that typically is negative for this market as well, as we have seen the risk appetite wax and wane, which has had the exact same effect in this market both historically and recently. There is a lot of potential for danger here, so keep your position size small.