GBP/JPY Forecast October 10, 2017, Technical Analysis

The British pound rallied against the Japanese yen during the Monday session, breaking out towards the 148.50 level at one point, but then pulled back to go looking for support near the 148 handle. If we can make a fresh new high for the session, I think we will continue to reach towards the 149 handle, and then eventually the 150 level. However, I find it very unlikely that the market can rally for a significant amount of time. I think that the breaking below of the 150 handle was very negative, so it’s going to take a move above there to have me convinced that we are suddenly going to start rallying for any real length of time.
The British pound of course has been a bit oversold as of late, so it makes sense that we may get a bit of a bounce. I don’t know how long this can last, because quite frankly I think that there are far too many moving pieces out there to instill longer-term confidence. However, I’m a big proponent of simply doing what the market does, so if we do get a change in attitude, I will certainly look to start buying. In the short term though, I suspect that rallies are to be sold, at the first signs of exhaustion on short-term charts. Ultimately, I think that there is even more support at the 145 handle, so I think that’s where the market may turn around. Again though, if we were to break above the 150 handle, I think it is a bullish sign, and probably sends this market towards the 152.50 level, and then eventually the 155 handle which was my previous long-term target, but obviously things have changed as of the last week.