GBP/JPY Forecast October 24, 2017, Technical Analysis

The British pound gapped higher against the Japanese yen during the trading session on Monday, reaching above the vital 150 level. We have since pulled back though, but only to fill the gap. I think that if the market can close above the 150 handle for the daily candle, it’s probably time to start buying again as the British pound will have made a significant break to the upside and should continue to find buyers above that level. However, if we were to break down below the 149.50 level, the market could drop down to the 149-handle next. The market tends to be very volatile, and quite frankly that should continue to be the case here.
Ultimately, I believe that the buyers will return, but keep in mind that this pair does tend to be a bit rest sensitive, and that is a major driver of the markets in general. If stock markets and commodity markets start to rally, that will probably put upward pressure on this market, but it can work both ways as a “risk off” situation will drive this pair lower. The British pound has been enjoying a lot of bullish pressure as of late, so you should keep that in mind, and at the same time with Abe winning the elections handily in Japan, it looks as if the Japanese yen will continue to soften going forward, as we should see a loose monetary policy coming out of Japan over the longer term. I believe that the British pound will continue to recover from the massive losses due to the exit vote, and if the cheap money continues to push stock markets higher, that’s even more reason to think that this pair continues to rally over the longer term.