GBP/JPY Forecast – British Pound Continues to Consolidate Against Yen

GBP/JPY Forecast Video for 13.11.23

British Pound vs Japanese Yen Technical Analysis

The British pound has continued to consolidate against the Japanese yen, as we are hanging around the ¥185 level. The ¥185 level of course is an area that has been a bit of a target for a while, and a bit of an anchor for price. As we continue to form these contradicting candlesticks, it just shows how confused and lost the market is right now.

That being said, it’s probably worth noting that the pair does tend to be very noisy when it comes to geopolitical noise, and of course the fact that the Japanese yen is considered to be a safety currency has a lot to do with what happens. However, at the same time you have to look at it through the prism of the Bank of Japan and its quantitative easing program, the only one out of all of the major central banks. In other words, it’s very likely that we will continue to see the Japanese yen continue to be a major victim of that policy. Furthermore, the interest rates in the United Kingdom will continue to outperform Japan for the foreseeable future, so that in and of itself will probably offer the possibility of a carry trade.

If we were to break above the highs of the last week or so, that gives the pair the possibility of reaching the ¥187 level. Breaking above the ¥187 level opens up the possibility of a move toward the ¥190 level, which I do think happens given enough time. If we break down below the lows of this week, then it’s possible that we could drop down to the 50-Day EMA, which of course is an area where you would see a lot of noise.

All things being equal, I have no interest in buying the Japanese yen, at least not until the Bank of Japan changes its monetary policy, and even if it did, it would have a long way to go before traders would be looking to get involved. With this, I think you got a situation where the market is a one-way trade, and we just simply trying to work off some of the excess froth.

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