GBP/JPY Forecast October 11, 2017, Technical Analysis

The British pound went sideways against the Japanese yen as we continue to hover around the 148 handle. This is an area that has attracted some attention recently, and now looks like we are simply ready to grind back and forth, going sideways and doing nothing. However, if we can break above the 140.50 level, the market can then perhaps go towards the 150 handle above. That’s an area that attracts a lot of attention longer-term, as it is a large, round, psychologically significant number. If we can break above there, the market could continue to go much higher over the longer term, and I would be aiming for the 155 level after that.
If we pull back from here, it’s likely that the market will go looking towards the 147-level underneath which has been massively supportive. That being the case, the market should find buyers in that area, but if we break down below there, it’s likely that we go down to the 145 handle as it is a massive round number that traders will continue to be involved on these largest levels. I believe that the market is very sensitive to risk appetite, so pay attention to the stock markets, as this pair goes higher when stock markets rally, just as a fall when they roll over. I believe that the volatility will show up in this market as well, and right now I think that part of the reason we are going sideways and the short-term, because we are awaiting the actions of the Federal Reserve to determine where we go next. The stock markets around the world are a little bit overbought in general, but I think overall the bullish pressure should continue. In the meantime, I’m just simply waiting for the signal.