GBP/JPY Forecast October 31, 2017, Technical Analysis

The British pound initially rally during the day on Monday, but found enough resistance near the psychologically important 150 handle to turn around and fall towards the 149.50 level. That’s an area that of course has a certain amount of importance to it, and I believe that the market should continue to find buyers underneath. The 150 level is a bit of a magnet for price, as it is a large, round, psychologically significant number. The area will of course always be important for the market, and I think if we can break above there, the market should continue to go much higher. Ultimately, the market should continue to be choppy, but I believe that if we have a bit of a “risk on” attitude, this pair should continue to go higher.
If we were to break down below the 149 handle, the market should then drop down towards the 148 level after that. Ultimately though, I believe that waiting for a significant and impulsive move is probably the best way to play this market. Because of the noise around the British economy and of course the United Kingdom leaving the European Union, it’s likely that we will continue to see the British pound bounce around. Ultimately though, if we were to break down below the 148 handle, the market probably goes looking towards the 147 level rather quickly. That would be a bit of a capitulation, so I think it shows a lot of negativity. Ultimately, if we break above the 150 handle, I think then we go to the 152.50 level over the longer term. Volatility is a mainstay of this pair, and that’s not to be anything different over the next several sessions, as headlines continue to burn things around.