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GBP/JPY forecast for the week of February 26, 2018, Technical Analysis

Christopher Lewis
Updated
The British pound has been very choppy during the week, as we are testing a significant uptrend line. I believe this is going to be a very important couple of weeks ahead, giving us an idea as to where we are going longer term.

The British pound has gone back and forth during the course of the week, forming a somewhat neutral candle. However, it looks likely that the candle is going to form a bit of the shooting star, and if we break down below the bottom of the shooting star, perhaps even breaking down below the uptrend line, the pair could go lower. The 145-handle underneath would be the target, but if we break down below there I think that the market could continue to go even lower.

The alternate scenario would be breaking above the top of the shooting star, which would be a very bullish sign. I think at that point; the market will probably go looking towards the 155 handle. That is a very resistive area as well, but when I look at this market, it’s very likely that even if we do rally, it’s going to be noisy. You can see that I have a couple of trendlines on the chart, suggesting that we are going to continue to see the market squeeze itself, perhaps exploding in one direction or the other. That being the case, the market could make a good move, but I would have to say that it’s favoring the downside at this point, as the market looks a bit susceptible to pressure. If we get a general “risk off” type of attitude around the world, that will push this market lower. If we break down below the 145 handle, I think we could have serious problems.

GBP/JPY Video 26.02.18

This article was originally posted on FX Empire

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