GBP/JPY Forecast October 20, 2017, Technical Analysis

The British pound fell drastically against the Japanese yen during the session on Thursday, as the markets have been extraordinarily volatile. We crashed into the 148 handle, but as I record this, we are starting to see a turnaround and strengthen the British pound again. I think this is just more of the same, extreme amounts of volatility followed by traders turning things around. Because of this, I think it’s only a matter of time before reach towards the 149 level again, so I’m a buyer. I recognize there is a lot of noise to be had in the meantime, but quite frankly we have been trending higher for some time, but that’s not to say that it’s been easy to deal with. I think that given enough time, we will go looking towards the 150 handle, but it’s going to take a long time to get there.
Looking at value
I believe that right now, you’re looking at value in this pair. I believe that we will continue to reach towards 150, but that will be a significant fight. Once we clear that, it’s time to start buying and holding this pair, but until then I think it’s a matter of buying on the dips, and looking for value as it appears. Ultimately, this is a market that will continue to show a lot of noise, and therefore small position sizing will probably be the best way to approach this market. If we were to break down below the 147 handle, then I think we break down to the 145 level, but right now it does not look like it’s going to happen. After all, after the significant crash, we are sitting around this area, showing signs of resiliency yet again.