GBP/JPY Forecast May 29, 2017, Technical Analysis

The GBP/JPY pair fell apart during the session on Friday, as it was announced that election polls are much tighter than originally thought in the United Kingdom. This of course has a lot of concern jumping into the market because what we once thought was going to be the political way going forward as far as the exit from the European Union is concerned, may not be a foregone conclusion. This pair tends to be very sensitive to risk appetite, so it only exacerbates the selling pressure. As we broke through the 143 level, we then shot straight down towards the 142 handle. The market now will be looking for support below, but rallies at this point in time should continue to be selling opportunities.
Risk sensitivity
Pay attention to risk appetite around the world, as this pair is highly sensitive to it. With this, you have to pay attention to stock markets, futures markets, and most certainly anything involving the British government and the British pound. Currently, the GBP/USD pair is falling rather hard, looking for support at a significant level in the form of 1.2750. If we can stay above there, then the market may very well turn around and find support. If not, we could drop as low as 140 without much effort as the large round numbers seems to be the next significant support barrier. I would look to the longer-term charts in order to place any buying opportunities to work. I think that the market will continue to be very volatile, so truthfully if you wish to play the British pound, you may be better off doing so against the US dollar or perhaps even the EUR as this pair can turn around on you rather quickly.