GBP/JPY Forecast June 7, 2017, Technical Analysis

The British pound fell significantly during the session on Tuesday against the Japanese yen, reaching towards the 141 level below. The market looks very likely to sell off on rallies, so I’m looking for exhaustive candles to take advantage of this bearish pressure. At this point, it would make sense that the market would go looking for the 140 handle underneath, as it is a large, round, psychologically significant number. The 142 level above would make a significant resistance barrier, so if we can break above there I think at that point buyers would step back in and try to take advantage of value. Currently though, looks as if the Japanese yen overall is starting to pick up value and prestige, so I think that the buyers are probably going to step to the side in this pair.
British elections
Let us not forget that the British elections are tomorrow, so that of course is going to offer a bit of trouble when it comes to anything related to the British pound. I believe that the market will eventually get past that, but right now it makes quite a bit of sense that this pair roll over as it is the safest trade to take between now and the results of the election. I don’t know if the market can break down below the 140 handle, because it most certainly will offer a bit of a “floor” going forward, but if we did I would anticipate that it will take more than one attempt to break down through that large number. Watch the stock markets as well, because of the start selling off that will be more of a “risk off” signal, which always works against this currency pair over the longer term.