GBP/JPY Price Forecast November 21, 2017, Technical Analysis

The British pound drift a little bit lower at the open on Monday, but found enough support at the 147.50 region to turn around and explode to the upside. As I record this, we are currently testing the 149 handle, an area that should be significant resistance. I believe there’s a lot of noise between here and the 150 handle, so I’m waiting for an opportunity to short signs of exhaustion on rallies, such as the one we find ourselves and now. After all, we have continued to make lower lows, and have yet to make a “higher high.” This is a very definition of a downtrend, but is also a very choppy market as “The Dragon” typically is. Keep in mind that this pair does tend to move with the overall risk appetite around the world, so if stock markets start to rally significantly, that could be good for this market as well. Obviously, the exact inverse is possible as well, as the Japanese yen tends to be thought of as a safety currency.
If we were to break above the 150 handle, at that point I think that the market could rally rather significantly, as it would clear a major barrier. By breaking above there, the market will probably go to the 152.50 level above, which has been massive resistance in the past. However, this would be a turn around and suggest that a move like that could send this pair much higher. I think that the British pound continue to have a lot of issues though, because quite frankly there’s a lot of uncertainty as a what happens next for the United Kingdom after leaving the European Union. Ultimately, I think this pair is going to be choppy regardless of which direction we go, but even with the move that we have seen on Monday, we are still in a downtrend.

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