GBP/JPY Price Forecast January 29, 2018, Technical Analysis

The British pound broke down against the Japanese yen during the trading session on Friday, slicing through the 155 handle as words out of the Bank of Japan suggested that the economy in Japan should expand and continue to extend, leading to speculation that quantitative easing will drop a bit. Ultimately, the market has been in an uptrend, and I think it’s only a matter of time before we continue to go higher, but right now looks as if we have some selling to do.

The 153 level should be supportive, I think a bounce could happen, but I would be very cautious about jumping in with both feet, as this market tends to be very volatile and of course it can be dangerous. If you add slowly on the way up, that is probably the best way to play this market, but in the meantime, you should be cautious. In fact, you may wish to wait for a daily chart signal to go long, but we also need stock markets to rally to give us an idea of a “risk on” type of situation. If we get that, then the market should continue the longer-term move.

This type of volatility is to be expected in this pair, so if you wish to buy the British pound, you may find it easier to do against the US dollar, as the greenback continues to suffer in general. The Japanese yen is getting a massive amount of bullish pressure on Friday, but that tends to be short-lived.

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