GBP/JPY Forecast June 12, 2017, Technical Analysis

The British pound gapped lower at the open on Friday, in reaction to the British parliamentary election giving some of the conservative seats back to the Labour Party. This of course has been a bit of a surprise, and it makes sense that the British pound would fall. We have seen the British pound gap lower against the Japanese yen, while the EUR has gapped higher against the pound. Ironically, the British pound seems to be stabilizing against the US dollar, so it is possible that we see this market try to fill the gap just above. The 142 level will be resistive, but if the GBP/USD pair breaks above the 1.2750 level significantly, that might signal that the British pound is going to gain back some of its losses, and this pair would of course be very sensitive to that. After all, the USD/JPY pair is grinding higher, so that suggests that the Japanese yen is selling off overall.
However, this pair has the caveat of the GBP
Just because the other Japanese yen related pairs are going higher doesn’t mean this one must, after all there is a significant British only event. However, if the British pound stabilizes against other currencies, this is where you will see the biggest move. Filling the gap would be the first thing that I would expect to see, but if we can break above the 142.50 level, the market would go much higher. Until then, one would have to assume that the sellers will probably jump in and try to push this pair back towards the 139.50 level below that has offered so much in the way of support. Either way, it is going to be choppy and volatile as his pair almost always is any way and under the best of conditions. Headlines again to be what drives this market.