GBP/JPY Forecast – British Pound Continues to Find Support Against the Japanese Yen

GBP/JPY Forecast Video for 17.02.23

British Pound vs Japanese Yen Technical Analysis

The British pound has fallen just a bit during early trading on Thursday, to reach out to the 50-Day EMA. The 50-Day EMA typically attracts a lot of attention, so this should not be a huge surprise that we have found buyers in this area. Furthermore, it looks like pressure is building up against the Japanese yen, so I suspect that higher interest rates are going to continue to take their toll on the Japanese currency, as the Bank of Japan continues to fight higher yields in their bond market. Because of this, that you get a situation where the market participants will continue to see this through the prism of whether or not the Bank of Japan will be printing more currency.

At the same time, there are arguments to be made for more interest rate hikes coming out of the Bank of England, as inflation and the jobs market seems to be pointing in that direction. Regardless, this is probably more about the Japanese yen and yield curve control than anything else, so at this point I believe that will be the biggest driver.

If we can break above the 200-Day EMA on a daily close, then I think that shows that we are ready to continue going higher, perhaps sending this market all the way back to the ¥165 level, which previously had been a major support level. That should now have a significant amount of resistance attached to it, and “market memory” should come into the picture at that juncture. If we were to break above there, then you could be looking at a move to the ¥167.50 level. On the downside, I believe the ¥160 level will continue to offer support.

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