GBP/JPY Forecast – British Pound Continues to Hover Around 160 Yen

GBP/JPY Forecast Video for 27.12.22

British Pound vs Japanese Yen Technical Analysis

The British pound has stabilized right around the ¥160 level, which is obviously a very important psychological round figure. If we can hold this and then start to break higher, I suspect that the market will go looking to the 200-Day EMA which is just above the ¥162.70 level. Whether or not that sticks is a completely different question, and this almost all will come back to the Japanese bond market. After all, we already know that the British pound is relatively flawed at the moment, but the question now is going to be whether or not the Japanese bond market will truly stay below 50 basis points.

Quite frankly, the move in the currency market was quite brutal, as the Bank of Japan decided that they were going to allow the ten year note to float 250 basis points. This relieved a lot of pressure on the Japanese yen, but it’s worth noting that we fell really hard and a lot of the Japanese yen related pairs, and since then have just sat there. But we are waiting to see what is the next catalyst. It almost certainly will come from the bond market so you need to be aware of what’s happening in the Japanese 10 year period

If we break down below the lows of the panic candlestick from last week, then it’s likely that we go looking to the ¥157.50 level, possibly even the ¥155 level. If we can turn around a break above the 200-Day EMA, we very well could continue the uptrend, but it would take a lot of effort to make that happen in the next few days as it is more about the holidays.

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