GBP/JPY Forecast May 8, 2017, Technical Analysis

The GBP/JPY pair rally during the day on Friday after initially dropping all the way down to the 144.80 region. Now that we have snapped back and have reach towards the 146 level, looks as if the market is going to continue to go much higher over the longer term. I believe that buying dips will continue to be a very strong trading tactic, as it has been since late April. The market will probably target the 150 handle given enough time, as it is a large, round, and juicy target for buyers. Remember, this pair tends to be very sensitive to risk appetite, which seems to be picking up after the stronger than anticipated jobs number out of the United States. With that in mind, it makes sense that this pair will continue to strengthen not only because of the risk appetite factor, but also the fact that the British pound has seen quite a bit of bullish pressure as of late.

Buying dips

Buying dips going forward I think is the best way to look at this market on short-term charts. On the other hand, if you can hang on to the trade for any real length of time, you may find yourself in a buy-and-hold type of mentality. Either way, I believe that the 145 level should now offer a bit of a floor in this market as we have seen an impulsive move higher during the day on Friday. Because of this, selling just can’t be done. I think that the British pound will continue to outshine most G 10 currencies, and that the Japanese yen will continue to sell off. While I am recording this, 146 is hanging tough, but I feel it’s only a matter of time before we get above there.