GBP/JPY Price Forecast February 15, 2018, Technical Analysis

The British pound fell initially during the trading session on Wednesday, reaching down towards the 148 handle. That’s an area that offered support, but we bounce from there to reach towards the 150 handle above, which was support. That’s an area that should continue to bring and sellers, but if we were to break above the 151 handle, then I would be convinced of the validity of some type of rally. I believe that the market will rally significantly from there, and perhaps more of a longer-term move towards the 155 handle. Alternately, if we break down below the 148 handle, the market should then go down to the 145 level. Ultimately, this is a risk sensitive currency pair, offering a lot of volatility when markets move rapidly. Remember, the British pound has been rallying after initially selling off against the US dollar, but the Japanese yen is a bit of a safety currency, so the stock markets roll over, that will put downward pressure on this market.

Obviously, if the stock markets rally significantly, this pair will do the same. I would be very cautious about my position size in this market, but it appears that the Japanese yen is doing reasonably well against several currencies right now, so more downward pressure is likely to happen, as we could continue to see volatility come into the markets again. Regardless of which trade gets fired off, jumping in slowly and adding when it works in your favor as the way to go.

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