GBP/JPY Forecast – British Pound Continues to Go Higher

GBP/JPY Forecast Video for 05.07.23

British Pound vs Japanese Yen Technical Analysis

The British pound has rallied slightly during the trading session on Tuesday, even though it was Independence Day and there would have been a severe lack of liquidity. All things being equal, this is a market that I think traders will continue to buy on the dips, as it is so bullish. That being said, the market is a little overdone, so we will have to wait and see whether or not value hunters will continue to come back into this market. The ¥180 level is an area that we’ve seen a lot of support previously, and of course it is a large, round, psychologically significant figure.

That being said, if we were to turn around and take off from here, then we could break above the ¥185 level, which opens up a bigger move. All things being equal, I think we have a “buy on the dip” type of market going forward, and therefore I have no interest in selling this pair. After all, the Bank of Japan continues to keep its monetary policy extraordinarily loose, and at the same time the British are dealing with a lot of inflation. Because of this, every time this market pulls back, I think there will be buyers willing to step in and pick up a bit of value.

Longer term, I believe that this pair will eventually break above the ¥185 level and then perhaps open up a bigger move toward the ¥200 level over the longer term. In fact, at this point, it would not be overly surprising to see this market hit that level by the end of the year due to massive momentum. That being said, there are some concerns that the Bank of Japan may intervene, but that will only be a temporary pullback in what is a much longer-term uptrend. After all, unless they change their monetary policy over the longer term, nothing will have changed as the British are dealing with so much in the way of inflation. Beyond that, a momentum market like this one will continue to be difficult to turn around.

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