GBP/JPY Price Forecast January 24, 2018, Technical Analysis

The GBP/JPY pair has fallen during the Tuesday session, breaking below the 155 handle again. That’s an area that coincides nicely with an uptrend line, so I think we could get a bit of a bounce. I think it’s time to start looking for momentum building trades. It might take a couple of attempts to break above the 155 handle, which has a certain amount of psychological significance built in. If we were to break down below the 153.50 level, we will probably go looking towards 152 next, and then possibly even 150 which is essentially the “floor” in this move. Longer-term, I do anticipate that this market breaks out to the upside, and continues towards the 162 handle, which is the top of the overall massive consolidation that had previously been featured.

This pair is typically volatile, and keep in mind that the risk appetite or traders will have a massive effect on what happens next. I recognize that this pair is likely to be noisy, but I suspect traders will be looking to take advantage of Japanese yen weakness overall, and therefore it makes sense to marry that with the overall bullish pressure of the British pound. Having said that, I would prefer to build a position slowly, and then add aggressively after we break above the 155 region, as it would show that the momentum has picked back up and that we are ready to continue going higher. Even though we do have the potential for breakdown, it would be short-term at best in my estimation.