GBP/JPY Price Forecast January 18, 2018, Technical Analysis

The British pound was very noisy against the Japanese yen during the trading session on Wednesday, showing lots of choppiness during the day. The 153 level above is massive resistance, and we did pull back during the early American trading. However, I think there is a significant amount of support underneath, extending down to the 152 level. The 152 level is an area that has proven itself a couple of times recently, as the buyers are trying to build up the momentum to finally break out to the upside. Ultimately, once we do breakout to the upside, I think that the GBP/JPY pair will eventually go to the 160 handle over the longer term.

The 152-level underneath being broken to the downside would of course be a very negative turn of events, perhaps sending the market down to the 151 handle, and then after that, the most important support level on the chart: the 150 level. I think that a lot of movement in this market will be tied to risk appetite around the world, and of course the negotiations between the European Union and the United Kingdom. Ultimately though, if there is a big move up in the stock markets, typically the GBP/JPY pair will rally as well.

Ultimately, I think you will need to be able to deal with the volatility, so adding slowly might be the best way to go, perhaps adding as the market has been moving in the direction of your trade, giving an opportunity to potentially take advantage of a significant break out to the upside.

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