GBP/JPY Price Forecast December 6, 2017, Technical Analysis

The British pound initially fell during the trading session on Tuesday, but found enough support near the 150.50 level to turn around and bounce significantly. The daily candle at this point would be a hammer, which of course is a very bullish sign. The break out above the 150 level was significant, but as I look at the chart I recognize that the 153 level is even more resistive. A break above there is a very bullish sign, and sends this market to at least the 155 handle, perhaps even higher than that.
I think pullbacks offer value, if we can stay above 150. A breakdown below the 150 level would be very negative, but in general I think that the markets continue to show signs of volatility that give us an opportunity to pick up the British pound at a cheap level. However, if we get some type of “risk off” event, the market could break down below the previously mentioned 150 handle, and then perhaps go looking as low as 148 below. Longer-term though, I believe that we are bullish, and when I look at the hourly chart I can even make a bit of an artistic interpretation of the recent action as a bullish flag. If that’s the case, then we could go looking towards the 160 handle longer term. That makes sense, because it has been resistance in the past on longer-term charts, and therefore it makes a perfect target for the longer-term traders to get involved. Keep your position size small though, because this pair does tend to be rather volatile, and therefore losses could come quickly if you are not careful.