GBP/JPY Forecast May 5, 2017, Technical Analysis

The GBP/JPY pair went back and forth during the session on Thursday, initially dipped them below the 145 handle but then finding enough buying pressure to continue to the upside. The market looks like it is going to continue to be choppy but it also is in a longer-term uptrend, and that of course favors buying on the dips anyway. I think that the 146 level will continue to be the overall target, and the 145 level should offer a nice support level. I believe in the longer-term validity of this market, but keep in mind that the GBP/JPY pair tends to be very risk sensitive, so the jobs number today of course will have a significant effect on how the market plays out. If we break down below the blue 72 hour moving average, the market will offer more selling pressure, but currently I believe that this is a market that you have to buy and cannot sell.
Risk appetite
Pay attention to the overall moves in the stock markets as they have a significant effect on how this pair moves, and gives us a clear indication of how traders around the world feel about taking risk. The more buying pressure that we get in those markets, the more likely we are to see traders jump into this one. Either way, I think that we will continue to see quite a bit of choppiness but obviously, an upward bias has been the case for quite some time. The announcement will cause a significant move one way or the other in this pair as it typically does, but I still favor the upside overall. Because of this, looking for support of levels underneath might be nice buying opportunities in a market that still has much higher to go.