GBP/JPY Forecast May 25, 2017, Technical Analysis

The GBP/JPY pair initially tried to rally during the day on Wednesday, but found enough resistance near the 145.50 level to turn around and break below the 145 handle. There is significant support in the general vicinity of where we are trading, but I think a pullback might be likely to see buyers underneath. If we can break above the 145.50 level, that’s a very bullish sign and should send this pair looking for the 147 handle over the longer term. This is a market that does look as if it’s trying to turn the overall trend around and reach towards the upside, but it is going to be volatile as per usual. Remember, this pair tends to be very sensitive to risk appetite in general, and with that being the case it’s likely that the market will be very difficult to deal with.
Pay attention to the stock markets
Pay attention to the stock markets, because they are the easiest way to measure risk and less of course you can reach towards the bond market and make sense of yield. Remember, this pair tends to rally one traders are feeling bullish in general about economic growth, and of course the exact opposite when they are concerned as the Japanese yen tends to be a “safety currency.” Ultimately, I think you’re going to have to be very nimble and you will probably need to trade in smaller positions and think longer-term due to the volatile nature of this market and of course all of the concerns when it comes to oil, Syria, and North Korea in general. In general, it’s probably best to step away, and perhaps trade the other young related pairs, but a small position might be able to be used.
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