GBP/JPY Price Forecast January 26, 2018, Technical Analysis

The British pound initially tried to rally during the trading session on Thursday but pulled back a bit as the Americans came on board. We are clear of the 155 handle, which of course is a psychologically important figure, so I think it will offer a bit of a floor. Judging the shape of the market as it is, I think that we will probably grind back and forth for a while, before eventually finding reason to go long. If we can break above the 156 handle, then the market goes looking towards the 160 handle. The 72-hour moving average is marked on the chart, which follows the uptrend line quite nicely, so I think it’s only a matter of time before the buyers get involved.

If we can stay above the 155 handle, I feel that we will eventually get the momentum to break out to the upside. The target will be the 160 handle, and then eventually the 163 level, which is resistive on longer-term charts. I like buying this market on dips, and that’s especially true considering that the stock markets continue to show plenty of supportive action, which tends to lift this market intern. I look at pullbacks as value, and I think that the 155 level is important. However, I also think that the support level extends down to the 154 handle, so it’s not until we break down below there that I would have to rethink the situation. I also like adding on short-term dips, building up a larger position.

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