GBP/JPY Forecast – British Pound Bounces Against the Japanese Yen From Support

GBP/JPY Forecast Video for 27.04.23

British Pound vs Japanese Yen Technical Analysis

The British pound pulled back initially during the trading session on Wednesday to test support underneath. The 165 level ended up being a bit of a launching pad, and we have seen a lot of strength since then. That said, the market continues to see a lot of noisy behavior but is bullish more than anything else. With that being said, the market continues to find plenty of value hunters and of course is probably driven more by the Japanese yen than anything else. With that being the case, I think you’ve got a situation where the market continues to be a “buy on the dips” type of situation.

Underneath, if we do break down below the ¥165 level, it’s possible that we could see the 50-Day EMA into the picture to offer a bit of support. Breaking down below that would be something a bit more important, but at this point, I think you’ve got a situation where you have to pay close attention to risk appetite because, quite frankly, it’s probably going to be what drives our market more than anything else. I think at this point, the fact that the buyers are very much in control, so now you have to be looking for value every time it drops. Ultimately, I do think that we will see a lot of erratic and noisy behavior, but eventually the market looks as if it is trying to get to the ¥170 level. Breaking above there would obviously be a very bullish sign.

Underneath, the 50-Day EMA is rising, but if we were to break down below there, then we could see the market drop down to the 200-Day EMA, which is near the ¥162.50 level and rising. That being said, I do not think it’s very likely that it happens, but it is something that you always need to keep in the back of your mind just in case. Remember, the Bank of Japan continues its yield curve control policy, and therefore it’s very likely that we will continue to see the Japanese yen somewhat soft against other currencies, especially as interest rates rise around the world.

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