GBP/JPY Price Forecast January 5, 2017, Technical Analysis

The British pound rallied significantly against the Japanese yen during the trading session on Thursday, as we broke not only above the 152 handle, but then broke above the 152.50 level. The market looks likely to test the 153 handle above, and go higher. I think if we can break above that level, it becomes a “buy-and-hold” situation, and we could start buying on pullbacks that give us an idea of value. It’s not until we were to break down below the lows of the Wednesday session that I would be a bit concerned, and I think that the “risk on” attitude should continue in the marketplace, and therefore should continue to propel this pair higher. Once we break above the 153 handle, I think the market is likely to get a 155, followed by the 160 handle, and then eventually the 163 level.

It might be choppy, but that’s the normal attitude of this pair, and therefore you may want to add slowly, and build up a larger position over time. Alternately, if we break down below the 151.50 level, I think that the market probably drops down to the 150 handle, which of course is a massive round number. That seems very unlikely though, unless of course the stock markets rollover significantly. The British pound looks very healthy at the moment, and it looks as if it is ready to break out not only against the Japanese yen, but also the US dollar. The volatility continues, but with an upward slant from everything that I see on this chart.

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