GBP/JPY Forecast – British Pound Bounces From 50-Day EMA
GBP/JPY Forecast Video for 29.11.22
British Pound vs Japanese Yen Technical Analysis
The British pound has fallen rather hard initially during the trading session on Monday but found enough support near the ¥166 level and the 50-Day EMA to turn things around and show signs of life again. By doing so, the market looks like it is trying to hang on, and perhaps continue the longer term uptrend. That being said, this market is very choppy to say the least and I think that will continue to be the case. Ultimately, this pair is highly sensitive to risk appetite, and as long as that is all over the place, it does make a certain amount of sense that we would see quite a bit of confusion.
Underneath the 50-Day EMA, I would anticipate that the ¥165 level should be significant support, while the ¥168.50 level should be significant resistance, at least based upon the recent trading action. To the upside, the ¥170 level is an area that a lot of people will be paying attention to, because if we can break above there it’s likely that we go back to the highs, and perhaps even break out from there.
Keep in mind that the Bank of Japan continues to buy unlimited bonds in order to practice yield curve control, something that is inherently bad for currency. Because of this, I do think that shorting this market is going to be very difficult, but you should keep in mind that the British pound has a lot of its own issues. With the British economy going into a two-year recession, the Bank of England will only be so aggressive when it comes to fighting inflation. In other words, expect messy trading with a slightly upward bias.
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