GBP/JPY Price Forecast February 21, 2018, Technical Analysis

The British pound rallied significantly against the Japanese yen on Tuesday, as the British pound rallied against many other currencies. This is a “risk on/risk off” pair in the Forex world, and it typically rallies when stock markets rally, as it is a sign of risk appetite coming back into play. Alternately, if the stock markets struggle, it’s likely that this pair will break down from there as well. The uptrend line underneath should continue to offer massive support, so I believe that this is a “buy on the dips” market, but I also recognize that you will need to sit through a lot of volatility.

If we can break above the 151 handle, the market is very likely to go towards the 153 handle, which is the next resistance barrier. I think that this is a market that will continue to be difficult, especially for the newer trader as they may not be used to the damage that this pair can do to their account, but on the other side of the equation is that it can lead to rapid gains. The question is whether you can deal with the volatility, or even easier – play with a small position. I think that’s probably the best way to go, adding slowly and incrementally. On a break above the 151 handle, I think that we will see fresh money coming back into this pair. Longer-term, I anticipate that the uptrend continues.

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