GBP/JPY Forecast June 14, 2017, Technical Analysis

The British pound break above the 140 level to the Japanese yen during the day on Tuesday, but I still see a significant barrier above in the form of the 142 handle. This is a pair that very risk sensitive, so pay attention to what’s going on in the world stock markets. The Tuesday session was very good to the Americans, so I think that’s part of what we are seeing here, a simple “risk on” rally. I do like this pair longer-term, but we also have to pay attention to the reality that there is so much uncertainty in the United Kingdom and therefore it’s going to be a very volatile currency, speaking of the British pound in general, and that is only magnified when you involve the Japanese yen.
Longer-term higher, short-term messy
I believe the longer-term we go higher, but in the short term this is going to be a messy trade. I would like to see this market continued strength, and if we can break above the 142 handle, I feel that the next target will be the 145 level, and then the 148 level. Longer-term, I think there’s a lot of money to be made holding on to this pair, but you have to be able to hang onto the volatility and therefore you will have to be very diligent when it comes to your position size. I recognize that there is a significant amount of downward pressure, so short-term traders may be involved to the downside, perhaps trying to reach as well as the 136 handle. Currently, we are in a large overall consolidate of region, but we are closer to the bottom than the top, and that always favors buyers coming in looking for value.