GBP/JPY Forecast May 16, 2017, Technical Analysis

The British pound had an explosive moved in the beginning of the session on Monday, but found the 147 level to be massively resistant. We’ve and formed a shooting star on the hourly chart before falling back over. I think that the market is going to reach towards the 146 level underneath, as it has proven itself to be supportive. On the other hand, if we break above the 147 level, the market should then go looking for the 148 handle. This is a market that has pulled back a bit lately, but quite frankly I think that the market is still very bullish longer term. Because of that, waiting for buying opportunities is probably the safest way to go. However, I do recognize that short-term traders may take advantage of this pullback as well. I personally do not wish to do so, and will be looking for either a breakout above the 147 handle, or some type of support at the 146 level to start buying again.

Risk appetite

Keep in mind that risk appetite heavily influences this market as well, so stock markets around the world continue to rise, this pair probably will as well. If we can finally break above the 148 handle, that would be a longer-term bullish signal, perhaps sending this pair towards the psychologically significant 150 level. That level will be massively resistive as it is a large, round, psychologically important number on longer-term charts, but I do think that it makes a reasonable target for traders trying to go to the upside in this market. If we did breakdown below the 145.80 level, I think at that point in time we would go looking for the 145 level, but that seems to be very unlikely.
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