GBP/JPY Forecast June 22, 2017, Technical Analysis

The British pound initially fell during the day on Wednesday, but found enough support to turn things around and explode to the upside. Part of this is due to the comments coming out of a Bank of England member suggesting that perhaps interest rates need to go higher. I believe that the market continues to favor the British pound in general, even with all of the potential headwinds. After all, the currency has been sold off rather drastically, and it’s likely that the longer-term outlook for the United Kingdom isn’t as poorly envisioned as some of the charts would suggest. Ultimately, I think that this market is ready to start looking towards the 142.50 level. Pullbacks should continue to offer buying opportunities, and I believe that the 140.50 level underneath should offer support.
Buying on pullbacks
I believe that this market continues to be one that can be bought on pullbacks, as it represents value and the Japanese yen of course is being sold off rather drastically. Ultimately, the market continues to look to sell off the Japanese yen as the “risk on” appetite comes back into the market. Because of this, I believe that this pair will be especially vulnerable to upside pressure as any time we get a good sign out of the United Kingdom, the markets will flood back into the British pound as it has been so overdone. Longer-term, I expect the market to go looking for the 150 level, but that probably isn’t going to happen anytime soon, as the volatility will continue and therefore I look to buy dips but in small sizes as the volatility of course could make this market rather difficult to navigate from time to time.