GBP/JPY Forecast February 13, 2017, Technical Analysis

The GBP/JPY pair initially tried to rally during the day on Friday, testing the 142.50 level. This is a market that continues to show bullish pressure, but if we can pull back and find plenty of buyers near the 140 handle, I think that will only add a stronger case to go long. Alternately, if we can break above the top of the shooting star for the day, the market should then reach towards the 145 handle. This is a market that is in a longer-term uptrend, and should continue to go much higher. I’ve no interest in selling. I believe that the British pound has put in a longer-term bottom against most currencies in the world.
This is a pair the does tend to be very volatile though, so a pullback really isn’t that surprising. The most recent low was higher than the previous one, so that’s the very essence of an uptrend. I have no interest in shorting, I believe that not only will reach the 145 handle, but we should then reach towards the 148.50 level. Ultimately, this is a market that should continue to find buyers on dips as it represents value. The Japanese yen has been sold off against most currencies around the world, and should continue to be. This is a bit of a “risk on” type of trade, and I believe that not only will the GBP/JPY pair continue to go higher, but I think most pairs against the Japanese yen well.
This pair tends to be a relatively choppy, but is prone to massive moves in one direction or the other based upon impulsive behaviors. This market looks like is ready to try to explode, but ultimately, we are essentially in a consolidation area but that normally means that we are trying to build up enough momentum to finally make an explosive moved. When I look around the markets, I don’t see the reason this market will continue to go higher longer term. You must be willing to “ride the Dragon”, which is typically an eventful trade. I’m a buyer, but I recognize that a breakdown below the 130.50 level would be negative.