GBP/JPY Forecast October 27, 2017, Technical Analysis

The British pound fell during most of the session on Thursday, reaching towards the 150-handle underneath. That’s an area that of course offers support, due to the gap from several days ago, and of course the large, round, psychologically significant number attached to that level. Given enough time, I think that we could get a bit of a bounce but I’m also aware that if we get some type of negativity around the marketplace, that could send this market lower, perhaps testing the 149 level which I see is even more supportive. On the bounce though, I think that the market probably goes back to the 151 handle relatively quick, and then perhaps the 152.50 handle.
This is a market that is historically very volatile, but as I record this, the market looks as if it is trying to test an uptrend that truly matters. If we break down below the 149 handle, then I think that the recent buying pressure in this pair is probably going to give way, with the market initially going to the 148 handle, and then the 145 level. Overall, this is a market that continues to be very noisy, but that’s the normal scenario that you see in this pair as we continue to find plenty of reasons to go in both directions. Pay attention to the stock markets in general, as they tend to be a leading indicator for this market at times, as it shows what risk appetite is like. As risk appetite increases, typically this pair will. On the other hand, if risk appetite roles over, typically this pair sells off as well. Either way, you will have to hang onto a lot of volatility, as this market looks ready to continue to be volatile.