GBP/JPY Forecast September 27, 2017, Technical Analysis

The British pound continues to grind sideways overall against the Japanese yen, using the 150 level as support. If we break down below there, I think that the market goes much lower. The pair tends to be very risk sensitive, so please keep that in mind. It’s likely that we will see a significant move lower if we break down below 150, mainly due to the fact that there is essentially “empty space” down to the 148 handle. Keep in mind that with these type of moves, it’s likely that they can be sudden and this pair is one of the swiftest running Forex pairs that I trade. Alternately, if we break higher, perhaps above the 151 handle, we should go to the 152.75 level next. I think this market will react to stock markets overall, and that the commodity markets also can have an effect on the GBP/JPY pair, as it shows just how willing people are to put risk on. The higher it goes, in general the better off we are doing.
Below at the 148.00 level I expect to see significant support, so I would not be concerned until we break down below there. I would look at that as an opportunity to pick up value, or perhaps to do a quick “smash and grab” trade to the downside if you are so inclined to trade short-term charts. I do think that a move towards the 152.75 level above will be slower in nature, but that’s typically the way markets go, they climb a “wall of worry.” At this point, it looks as if the support is trying to hold, but waiting for the market to tell you which way it wants to go next is probably going to be the only thing you can do.