GBP/JPY Forecast May 24, 2017, Technical Analysis

The GBP/JPY pair initially was very flat during the session on Tuesday, but then skyrocketed towards the 145 handle. By doing so, looks as if we are trying to break out to the upside again, and continue the volatility that we have seen as of late. Keep in mind that the yen related pairs tend to move in tandem, so pay attention to the other ones as well. If they continue to rise, then this pair should as well as it tends to be very mobile and tends to make more exaggerated moves than the other yen related markets. If we can break out to a fresh, new high, I believe that the market will continue to go higher, perhaps reaching towards the 147 handle. Pullbacks of this point should continue to be buying opportunities, as there seems to be a significant amount of support just below.
Risk sensitivity
You cannot trade this market without paying attention to risk sensitivity, as risk appetite drives where we go next. If we can continue to see strength in the equity markets, that should help this pair, as the 2 tend to be related over the longer term. A break above the 146 handle is also going to be obvious to most traders around the world, and I think that could only add fuel to the fire if you will to the move higher. The 150 level is a nice longer-term target, but there are going to be a lot of headlines out there that could move the marketplace between now and then. Ultimately, volatility is the norm in this pair but if managed properly can be an extraordinarily profitable trade just waiting to happen. Based upon the impulsive candle that we had seen later in the day on Tuesday, it looks as if the buyers are starting to jump in again.