GBP/JPY Forecast May 15, 2017, Technical Analysis

The GBP/JPY pair fell during the session on Friday, breaking below the bottom of the Thursday session. More important, we had formed a shooting star the weekly chart and it suggests that perhaps we need to pull back. With that being the case, I believe that we will continue to see selling pressure, perhaps reaching down to the 145 level, and maybe even lower than that. When I look at this chart, I recognize that it is still very much in a bullish situation, but we have been far too parabolic. The shooting star on the weekly chart suggests that we are going to drop and therefore I think that a cooling-off period must be reached. That doesn’t mean that I’m willing to sell though, although short-term I suppose you could. What I’m looking for is a supportive daily candle underneath to take advantage of.
Risk appetite
The risk appetite of the overall markets continue to drive this pair. Ultimately, the market should continue to find buyers underneath, so a bit of patience may be needed to take advantage of what I think is going to be a larger move. If we can break above the 149 level, the market should then go to the 150 handle next. Ultimately, this is a market that should continue to find volatile situations, so having said that I believe that you will not only have to be patient, but have to deal with massive swings in the position. However, it looks as if the longer-term decision has been made a, so I think short-term selling is possible, but for myself I’m going to wait for the buying opportunity that will almost undoubtedly presented itself underneath. This impulsive move certainly hasn’t been made for no apparent reason.