GBP/JPY Forecast May 22, 2017, Technical Analysis

The GBP/JPY pair had a bullish session on Friday, breaking above the 145 handle. The market has been sold off drastically over the last several sessions, but most of that would’ve been a “risk off” move due to concerns about Washington DC political theater, and not due to anything of importance. The Brazilian crisis of course has made some people a bit more cautious as well, but longer-term the should have no effect on this currency pair. On top of that, we managed to find support late in the day above the 145 handle, so the market is obviously supported and of course comfortable in this general vicinity.

Crossing moving averages

The red 24 hour exponential moving average has just turned towards the 72 hour exponential moving average, and looks ready to start crossing it. If it does, that’s only a bullish sign and should send this market higher. I believe at this point, the market will probably go looking for the 146 handle, and then given enough time the 150 level. It will probably take a certain amount of strength and patience to get there, but pullback should continue to offer value in a market that seems to be very resilient. The 144 level underneath should be massively supportive, and as long as we can stay above there I think that the market should continue to find buyers. Ultimately, this is a market that will remain choppy and volatile as usual, but it certainly seems to have plenty of bullish pressure built into it, as it looks as if the British pound is starting to find quite a bit of favor with traders around the world against most currencies, and of course the Japanese yen will be any different on that count.
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