British Pound Spikes Against Japanese Yen During the Week

The British pound has broken higher during the course of the trading week to break above the ¥155 level. The ¥155 level is an area that of course is psychologically important, but we have sliced through it so easily that now it looks as if we are going to try and reach towards that “double top” near the ¥158 level. If we can break above there, then the market is likely to continue going higher over the longer term. This is a market that is also being pushed by the Bank of England becoming much more hawkish, thereby driving the British pound much higher against almost everything.

GBP/JPY Video 07.02.22

The size of the candlestick is of course reasonable and strong, so I think that it is probably only a matter of time before we try to go higher, but if we were to turn around and lose the ¥155 level on a daily close, that could send the market looking towards the ¥152.50 level, where we had bounced from previously. That is an area that I think will attract a lot of attention, because if we break down below there, it would suggest that the market goes looking towards the ¥150 level at the very least.

The only way that I see this market breaking down significantly would be due to the fact that the Japanese yen would be bought based upon fear due to the markets melting down. While that is certainly possible, the reality is that the Bank of England becoming much more hawkish has certainly put a turbocharged into this market, and therefore I think it is much easier to go higher.

For a look at all of today’s economic events, check out our economic calendar.