GBP/JPY Price Forecast February 7, 2018, Technical Analysis

The British pound initially tried to rally during the trading session on Tuesday, reaching as high as the 153 area but rolled over rather significantly to test the lows again. This pair of course is very sensitive to risk appetite, and that has been very low recently. Stock markets around the world have been selling off, and as long as they continue to do so, is very likely that this pair will struggle. I am looking for an opportunity to go long, but I certainly wouldn’t do so without forming at the very least a “higher low”, or better yet: a “higher high.” Until then, I am on the sidelines as I recognize that we are oversold, and longer-term charts still suggest that there should be buyers.

I think volatility is something that you should continue to expect, but keep in mind that if stock markets turn around and rally, perhaps in some “risk on” move, this pair will explode to the upside as it tends to be highly volatile in those moments. I do believe that we are getting close to finding a lot of value in this pair, so if you are patient enough you should be able to find an opportunity to go long. Currently, a move above the 153 level would have me buying, as it would be the previously mentioned “higher high.”

If we do break down to a fresh, new low, then I think we will go looking for massive support at the 150 handle, which is a major level on the longer-term charts. I would be even more interested in buying it that area if we get there.

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