GBP/JPY Price Forecast February 1, 2018, Technical Analysis

The British pound fell during the trading session on Wednesday but turned around to bounce significantly. I believe that the market is trying to build up enough pressure to reach the 155 handle, and then eventually break out above there. The longer-term uptrend in the British pound seems to be built into the Forex markets, so there’s no interest on my part of shorting this market.

In fact, I believe that the 152 level is offering a bit of a “floor” now, not to mention the 150 level under there. If we break down below the 150 level, the market will collapse at that point, and I think go much further to the downside. However, as this market is very sensitive to risk appetite around the world, it would take some type of financial event in the vein of “risk off” attitude to send this market lower.

The one thing that is slowing this market down a bit is the USD/JPY pair struggling. That of course has a massive effect on the Japanese yen, perhaps putting a little bit of artificial bullish pressure on it. Even so, it’s obvious that this market is trying to break out to the upside and I think that if we get some type of explosive and positive risk appetite scenario, this market will be one of the best ones to hang onto. If we can break above the 156 level, we are free to go to the 160 handle.

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