GBP/JPY Forecast May 4, 2017, Technical Analysis

The British pound had a very eventful session during the day on Wednesday, as the 145 level of course attracts quite a bit of attention. I think that longer-term, we will continue to see buyers but it is going to be difficult to hang on to the volatility for most people. I believe that this is a “buy-and-hold” situation, and that every time we dip, it will find support given enough time. The 144.50 level underneath should be a bit of a “floor”, and this of course is a reasonable place to look for value in an uptrend. If we can break above the 145.40 level, I think that the market then reaches towards the 146 handle. Longer-term, I’m looking for moved to the 150 level above.
Risk appetite
This market is highly sensitive to risk appetite, and it’s easy to see what that is by looking at the stock markets around the world. This is especially true with the Nikkei 225, and the S&P 500. If they show signs of strength, I think that this market will continue to attract people going to the long-term. The 24, 48, and 72 hour moving averages all continue to show bullish pressure, so I have no interest whatsoever in shorting this market. The market tends to move rather quickly, so by getting long this market on short-term dips you are prepared for the explosive moved that will more than likely occur. This is one of the most volatile markets that we cover, but when it makes up its mind, the rewards can be great. The one thing that you will have to pay attention to is that you have stops in place as obviously, a can work in the opposite direction as well. Currently, I believe that the buyers run the show.
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