GBP/JPY Forecast May 30, 2017, Technical Analysis

The British pound rallied during the day on Monday, as we continue to see some stabilization in the British pound after the massive selloff. I believe personally that the selloff was a bit overdone, as it was a reaction to election poll results in the United Kingdom, showing that perhaps Teresa May could be in a bit of trouble as the spread between her and leftists has shrunk. However, the longer-term I still believe that Britain is going to go conservative, and that gives a bit of certainty to the marketplace as to the exit that we expect coming out of the European Union. I believe the pullbacks will be buying opportunities, and I also believe that the 142 level underneath will be massively supportive. As long as the GBP/USD pair stays above the 1.2750 level, I believe that the market over here will be bullish, or at the very least not bearish.
Risk appetite
This pair is highly sensitive the risk appetite, so if stock markets start rallying again, there is often a knock on effect in this market. It is very volatile, so having said that it’s a market that you will have to be able to deal with on a daily basis that will jump around quite drastically, and therefore typically will warrant a smaller position than in something like the USD/JPY pair, but it also has the ability to offer much more in the way of profits. This of course is what makes it such an interesting pair, but I believe that the buyers are starting to make a significant stand at this point. I would anticipate significant resistance near the 143.50 level next, but a break above there would only increase the speed of the rally that would come next.
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