GBP/JPY Forecast December 18, 2017, Technical Analysis

The British pound broke down during the trading session on Friday, clearing the 150 level towards the end of the day. We have bounced back towards that area though, and are starting to see a bit of selling pressure. I think if we rollover below the 149.50 level, the market is likely to go down to the 148-handle underneath which is the next support level. I do believe that this market goes higher longer term, but this pullback is simply a return to the channel that we have been trading in over the last year. Remember, this pair is highly sensitive to risk appetite around the world, so keep that in mind as well. If stock markets rally, typically this pair will do the same thing. However, if there is a general run to safety, the Japanese yen is bid.

The 153 level above is the game changer for this pair, turning it into a “buy-and-hold” scenario. Because of this, I think that short-term trading is only can do right now, buying on dips as they show support to the upside, or if we break down below the 149.50 level, then selling and aiming for the 148 handle where I would expect to see a lot of noise and of course support. If we break down below 148, then were free to go to 145 but that’s the least likely of the scenarios I am looking at currently.

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