GBP/JPY Forecast May 2, 2017, Technical Analysis

The British pound continues to grind higher against the Japanese yen, as risk sentiment seems to be a little bit stronger. As you can see on the hourly chart, we have a nice uptrend line that we have been following, and it looks as if we are going to go looking for the 145 handle above. This of course is a large, round, psychologically significant number, and could cause a bit of bearish pressure. This is an area that’s been important on the daily charts as well, so quite frankly it would not surprise me at all to see this market test that level, and then turned right back around to find buyers at lower levels. I don’t think that selling this market is something that’s viable, as I feel it is only a matter of time before the buyers would return. So, having said that, I look at dips as buying opportunities and of course value that can be taken advantage of.
The market breaking above the 145 level would be a very strong sign, reaching towards the 150 level over the longer term. Remember that this pair tends to be very sensitive, and of course moves very erratically at times. You have to take a bit of a longer-term outlook on this market, as the volatility can be extreme. Having said that though, the rewards are much higher. You have to be able to deal with the volatility to be involved but I think there are plenty of reasons to think that we go higher over the longer term. I believe that the 143 level will be massively supportive for example, so pullback should only offer value that you can take advantage of and build up a larger position. Once we break above 145, we could have quite a bit of momentum unleashed.
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