GBP/JPY Price Forecast November 27, 2017, Technical Analysis

The British pound rallied significantly during the trading session on Friday, reaching towards the 149 handle, an area that has been resistance. I think that in general the market continues the consolidation, and I believe that the market could roll over from here and go looking towards the 148 handle again. Alternately, if we do continue to rally from here, the market probably goes looking towards the 150 handle, as it is a massive resistance barrier. The noise in this market continues to be extraordinarily volatile, and I believe that the risk appetite will have a major influence on where we go next. I think that the British pound is trying to break out to the upside against many currencies right now, but the Japanese yen will be a bit of an outlier, as any type of “risk off” attitude will favor the yen.
I believe that using a secondary indicator such as the Stochastic Oscillator to identify overbought and oversold conditions along with basic support and resistance could be the best way to trade this market. In general, the market should continue to be one that you should use small positions in though, because of the difficult nature. I think that we will continue to see this market trying to build up some type of momentum and breakout, but right now I think that you are probably better served assuming that the consolidation continues, because it’s going to take some type of assertive breakout of the British pound in other markets to translate to bullish pressure here. If we do break down from here, meaning below the 147.50 level, the market will probably go looking towards the 145-handle underneath which is significant support. Expect noisy conditions regardless of which direction we go.