GBP/JPY Price Forecast January 11, 2018, Technical Analysis

We have broken down below the uptrend line that had been supporting the GBP/JPY pair lately, and by slicing through that uptrend line, I have become a bit concerned about the uptrend in this pair. I don’t think we are going to explode to the downside, I think this is more based upon the idea that perhaps the Bank of Japan isn’t going to keep its monetary policy as loose for as long as we thought. I believe that the 150-handle underneath is massively supportive, and therefore I think it’s not until we break down below there that I truly become concerned. Obviously, we need to reassess the entire situation, but I think that it’s only a matter of time before we rally again. After all, this is a market that is typically driven by risk appetite, but it the idea of the Bank of Japan stepping away from quantitative easing has spooked a lot of people. In the end, it is just speculation and there’s nothing written in stone about that idea, and I think the market may have gotten ahead of itself.

The volatility will remain, so I would be very careful about putting a lot of money into the market, but I think that given enough time I think that we will see a lot of buying pressure. However, I think it’s a very careful situation though, so add slowly, if we break out to the upside. Otherwise, if we break down below the 150 handle, it’s likely to be a market you should step away from until we get a longer-term signal.

Economic Calendar