British Pound Pulls Back Slightly Against Yen Heading Into the Weekend

British Pound vs Japanese Yen Technical Analysis

The British pound has pulled back a bit during the trading session on Friday to show a proclivity to reach towards the ¥160 level. This is a very interesting level because it has been important multiple times in the past. If that area holds, then we may find that we are going to head into an area of consolidation, which is actually quite bullish considering how parabolic we have been. However, if we were to break down below the ¥160 level decisively, that could have a detrimental effect on the market for the short term.

At that point, I would anticipate that the British pound would trade down to the ¥157.50 level, an area that previously had been massive resistance. That area should now be supported, and we could get a bit of a bounce. If a breakdown below there, then things get rather ugly. Keep in mind that this pair is highly influenced by risk appetite around the world, so pay attention to the stock markets and how they are trading as they give you an idea of risk appetite in general.

All one has to do is look at the market and recognize that it is far too overbought, as it has been such a parabolic run. The question now is whether or not we get a pullback, or if we need to go sideways in order to work off some of the froth? The fact that we are bouncing from the ¥160 level suggests more along the lines of consolidation, but these things can turn quite quickly when they get this stretched.

GBP/JPY Technical Analysis Video 28.03.22

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