GBP/JPY Forecast – British Pound Continues to Find Buyers on Dips

GBP/JPY Forecast Video for 19.05.23

British Pound vs Japanese Yen Technical Analysis

The British pound initially pulled back just a bit against the Japanese yen on Thursday, only to turn around and show signs of hesitation. By doing so, it looks as if the market is trying to build up the necessary momentum to finally break out to a fresh, new high. If it does, it could open up a big move to the upside. In that scenario, the market with more likely than not challenge the ¥172.50 level, and upon overcoming that level, then we would be talking about the ¥175 level rather quickly.

Pullbacks at this point in time should continue to see plenty of buyers, and therefore I think we get a situation where plenty of people continue to see reasons to go along against the Japanese yen. After all, the Bank of Japan continues to see the need to keep interest rates low, that of course is toxic for currency. It is probably only a matter of time before the market takes onto the upside, especially as the Bank of England remains very tight with its monetary policy.

The ¥167.50 level underneath is significant support, and then of course the 50-Day EMA is racing toward that area as well. With that being the case, the market is likely to continue to see the upward pressure over, everything. Alternatively, the market then opens up the possibility of the pair being a one-way trade, just as we have seen for some time. The market continues to be a situation where we will find plenty of opportunities on pullbacks, and therefore if you are cautious and wait for value in the British pound, it’s very likely that you will have a trade set up rather quickly.

Either way, this is a market that I don’t have any interest in shorting any time soon, especially as it has proven itself to be so resilient over the last week or so. With this, market participants continue to see plenty of reasons to get involved and you can even make an argument that we are in the midst of trying to break out of a bullish flag.

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