GBP/JPY Price Forecast January 31, 2018, Technical Analysis

The British pound has bounced significantly from the 152 handle, which is the 50% Fibonacci retracement level from the rally higher. I think that if we can clear the 154 handle, then it’s likely that we are going to go looking towards the 155 level, and then eventually the 156 level. Longer-term, I do believe that this pair goes higher, and it is of course very sensitive to risk appetite overall. So, if the stock market rallies, typically this pair will go higher as well. Of course, the opposite is true as well.

The 152 level below seems to be massively supportive, so I think that a pullback towards that area could be a nice buying opportunity as well, but I do recognize that the absolute “floor” in the market is probably closer to the 150 handle, as it is not only structurally supportive, but psychologically supportive as well.

I anticipate that the market will continue to be very volatile, and I do think that we will eventually go higher over the longer term. I believe that the market should go looking towards the 162 region, which is the top of the overall consolidation area just above. There is a lot of noise there, but I think that the market will eventually grind higher and reach that target. I also believe that we will eventually break above that level and continue the longer-term “buy-and-hold” strategy. I like buying pullbacks in the meantime.