GBP/JPY Forecast September 20, 2017, Technical Analysis

The GBP/JPY pair did very little during the day on Tuesday as we continue to hover just above the 150 handle. This is a psychologically significant level, and I think that if we can hold as support, that would be a very good sign for the future. Even if we drop from here, I suspect that there is going to be a certain amount of support underneath at the 140.50 level also, as it was major resistance previously. The British pound has been enjoying strength as of late, while the Japanese yen has been selling off due to the “risk off trade” winding down. Remember, this market is very sensitive to risk appetite, so I believe that if the stock markets can continue to go higher, this market should continue to rally. In fact, I like buying dips as it offers value in one of the stronger currency pairs that I have seen lately.
Building a position slowly
I believe the building a position slowly in this pair is probably the best way to go, because it is so volatile. After all, you can pull back 3 handles and still stay in a relatively strong uptrend. This is a market that should continue to be choppy as per usual, but I think that it’s only a matter of time before we get some reason to go higher. Watch the GBP/USD pair, because it has a massive influence on this pair as well, as it measures the British pound against the “benchmark” of the Forex world. I think that if the Federal Reserve stands pat, it’s likely that the “risk on” trade will come back into play, and that should send this market much higher. I have no interest in shorting this pair currently, as it has been so bullish.