GBP/JPY Forecast June 21, 2017, Technical Analysis

The GBP/JPY pair went sideways initially during the day on Tuesday, and then fell apart, slamming into the 140.50 level underneath. This is an area that could continue to be important, but as we have filled the gap from a couple of weeks ago, the sellers could be looking for a technical breakdown. Pay attention to the overall attitude of commodities and stock markets, because if they fall apart, that should continue to put bearish pressure on this market. A breakdown below the 140.50 level is a negative sign, reaching down towards the 139 level. This is a market that will continue to be volatile, but I think we are starting to get a little bit oversold in the short term. Ultimately, this is a market that could be very dangerous, but I believe that the patient trader can make money in both directions.

Risk on/risk off

This continues to be a market that is based upon risk appetite, so again, pay attention to the stock markets and commodities. We also have the added issue of the United Kingdom leaving the European Union, and that of course will continue to cause a lot of noise when it comes to the British pound overall. That of course will have an effect on this market, and should be paid attention to. If the British pound rises, we should turn around and send this market to the upside. On the other hand, if the British pound fall significantly, that will be exacerbated against the Japanese yen as it is considered to be a “safety currency.” I think you will see a lot of choppiness, but by paying attention to the other coordinated markets, you should be able to get an idea as to how this market will behave.