GBP/JPY Forecast – British Pound Continues to Find Buyers On Dips Against Japanese Yen

GBP/JPY Forecast Video for 31.01.23

British Pound vs Japanese Yen Technical Analysis

The British pound has pulled back again against the Japanese yen in early trading, to reach down toward the ¥160 level. The ¥160 level has proven itself to be important couple of times now, so it should not be a huge surprise to see that we turned right back around. The question of course at this point is going to be whether or not we can take out to the upside, because the market does seem to be getting a bit more aggressive. If we can wipe out the 50-Day EMA and then the ¥162.50 level, I think we have a sizable move ahead of us.

On the other hand, if we break down below the Wednesday candlestick of last week, it could open up a significant amount of selling pressure. In that scenario, the market could very well find itself all the way down at the ¥157.50 level rather quickly. That being said, we would need to see interest rates around the world fall fairly precipitously to make that happen, as the Bank of Japan continues its yield curve control program.

If we do break to the upside, I think it’s a pretty clear shot all the way to the ¥165 level. If we can break above there, then the market really could start to take off. I think more likely than not, we are going to have quite a bit of upward pressure, but I also believe that it is going to be very erratic between now and the middle of the week at the very least, as the Federal Reserve meeting may strike a tone for the overall market.

For a look at all of today’s economic events, check out our economic calendar.