GBP/JPY Forecast – British Pound Bounces From Bottom of Range

Christopher Lewis
Published: Feb 8, 2023, 14:41 UTC

The British pound has bounced a bit during the trading session on Wednesday, as we look at the bottom of the range as being supportive yet again.

British Pound, FX Empire

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GBP/JPY Forecast Video for 09.02.23

British Pound vs Japanese Yen Technical Analysis

The British pound has bounced a bit during the trading session on Wednesday, hanging around the ¥157.50 level. The ¥157.50 level has been an area of interest multiple times, and that support extends all the way down to the ¥155 level. On the upside, we have the ¥160 level as a potential short-term target, and then after that you have the ¥161.50 level where the 50-Day EMA and the 200-Day EMA indicators are hanging about.

Keep in mind that a lot of this is going to come down to how the Bank of Japan has to react to bond markets, as they are trying to keep interest rates down to 50 basis points on the 10 year note, and this means that they may have to print yen. Furthermore, this pair is highly sensitive to risk appetite, and therefore it’s interesting to see how this plays out.

All things being equal, I think we just continue to bang around until we don’t. I know that’s rather simplistic, but that’s how you play range bound markets, you assume that the range is going to go on forever but understand that you need to keep your position size reasonable because sooner or later you will lose. In other words, you want to make several gains before taking that small loss. In fact, I know people who have made entire careers out of that type of trading.

At this point, we are obviously closer to the middle of the range, so I don’t know that I would enter right here, but it’s obviously a market that is compressing, and therefore we need to keep an eye on the possibility that we break out.

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About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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