GBP/JPY Forecast July 6, 2017, Technical Analysis

The British pound initially rallied against the Japanese yen during the session on Wednesday, but found enough support underneath that the 146 level to bounce and show signs of life again. The market should continue to be very bullish, and reach towards the 147 level. A break above there should send this market towards the 150 handle. I believe that even if we break down below here, the market should then go looking towards the 145-level underneath which was previous resistance and it should be massively supportive. The market is a bit rudderless currently, as the markets are paying attention to the divorce proceedings between the European Union and the United Kingdom. Because of this, there are a lot of headlines that could move this market, and never forget that it is extraordinarily sensitive to risk appetite.
Stock markets
One of my favorite ways to trade this market is to pay attention to stock markets, and then just simply follow in the same direction. I think that the 145-level underneath is essentially the “floor” in the market, and as long as we stay above there and think there will be plenty of pressure to the upside as we continue to see the Japanese yen selloff against other currencies. However, the British pound of course carries the risk of headlines coming out that can send people running from the pound. With this, it’s likely that you will need to deal with the volatility, and that is something that is best dealt with in the smaller trading positions as they become less painful. Adding to the position as the market works in your favor is probably the best way to deal with this market over the longer term, as eventually the trend will present itself.