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GBP/JPY forecast for the week of December 25, 2017, Technical Analysis

Christopher Lewis
Updated
The British pound rallied again against the Japanese yen during the week, showing signs of strength. The market looks likely to be bullish overall, but we have a significant resistance just above.

The British pound rallied a bit during the week, using the 150 level as support. It now looks as if were going to reach towards the 153 level above, which is massive resistance. If we can break above the 153 handle, I think it becomes more of a “buy-and-hold” situation. I do believe that happens given enough time, and of that pullbacks are buying opportunities. If we did breakdown below the 150 handle, the market probably finds support near the 147.50 level. The market should continue to go much higher in my estimation, perhaps reaching towards the 163 handle.

This we could be very difficult to trade though, because we won’t have much in the way of volume. If we break down below the 145 handle, that would be a horrible sign. In general though, I believe that the British pound is going to continue to pick up volume and interest by traders as the British pound has been historically cheap for some time. The market should continue to see volatility, but those move should be nice buying opportunities and an opportunity to pick up more of a position. The longer-term outlook for this market is bullish, as we have seen a positive year.

If for some reason we were to break down, I think the 135-level underneath would be the “floor”, but I would be very surprised to see the market reach down to that area, or even break down. I believe that there are enough value hunters out there looking to get involved. With global equities looking likely to go higher, I think this pair will follow.

GBP/JPY Video 25.12.17

This article was originally posted on FX Empire

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