GBP/JPY Price Forecast January 4, 2017, Technical Analysis

The British pound fell significantly during the trading session on Wednesday, slicing down to the 152 handle. This is an area that has been important in the past, as it was resistance. Ultimately, I believe that we will find buyers, and this pullback is simply going to offer a bit of value. We have been grinding to the upside, reaching towards the 153 level. That’s an area that is vital to the marketplace, because if we can break above there we could go much higher, and start the next phase in the uptrend that we have seen. If we cannot break above there, then I think the market will eventually break down to go much lower, with the initial target being the 150 handle. I believe that in general, markets continue to find a lot of volatility but also a lot of bullish pressure. The British pound has been oversold for some time, and I think at this point in time, these pullbacks offer an opportunity to go long. Once we break above the 153 handle, I think that we will go looking towards the 160 handle, and eventually the 163 handle. I believe that this year will be good for this pair, as the British pound had been sold off a bit too much over the last couple of years.

Keep in mind that this pair is highly sensitive to risk appetite in general, so of stock markets rally, that should help this pair as well. If we get some type of huge “risk off” move around the world, then that of course weighs upon the value of this market.

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