GBP/JPY Forecast – British Pound Continues to Grind Higher Against the Japanese Yen

GBP/JPY Forecast Video for 03.07.23

British Pound vs Japanese Yen Technical Analysis

The British pound has rallied a bit during the course of the trading session on Friday as we continue to see plenty of strength against the Japanese yen. Remember, the Bank of Japan continues to keep a massive amount of quantitative easing out there, so I do think this is a situation where we will probably continue to see a lot of upward grinding, perhaps reaching to the ¥185 level rather soon. The ¥185 level is a large, round, psychologically significant figure that a lot of people will be paying attention to, but I think that we go much higher given enough time.

The market has the potential to go all the way to the ¥200 level, that doesn’t necessarily mean that it happens overnight. I think this is a scenario where if we can get a little bit of momentum, it’s likely that we will see an attempt to get there, perhaps by the end of the year. That being said, dips in the market should end up being nice buying opportunities, as we continue to see plenty of interest rate differential between the Bank of Japan and just about everybody else on the planet. This is especially true with the British, who have a ton of inflation to worry about as well. With that being said, the interest rate differential should continue to expand, and therefore favor the upside momentum again. With this, I think you’ve got a situation where every time we pull back, you should be looking to buy British pounds. The ¥180 level underneath is a massive support level, and then after that we have the ¥175 level, where we have the 50-Day EMA.

Ultimately, this is a situation where we see a lot of upward momentum given enough time, so therefore I think we’ve got a situation where we have to see a little bit of value, but once that value shows itself, traders will almost certainly jump back in, as it offers such a nice opportunity. I have no interest in shorting this pair anytime soon, due to the fact that the Bank of Japan is nowhere near tightening.

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