GBP/JPY Forecast – British Pound Continues to Reach Toward Top of Range

GBP/JPY Forecast Video for 12.04.23

British Pound vs Japanese Yen Technical Analysis

The British pound has rallied a bit during the trading session on Tuesday to reach the ¥166 region. This is an area where we have seen some selling pressure recently, so it will be difficult to break above there. That being said, if we can take out that massive “wipeout candlestick” from December, then we could go toward the ¥169 level. A short-term pullback does make a certain amount of sense, but I think there are plenty of reasons to think that there are buyers underneath. For example, the 50-Day EMA which sits just below the ¥163 level and is rallying higher.

That being said, it does look like the market is trying to do everything he can to rally, so I think this remains a bit of a “buy on the dip” type of market as we continue see the Japanese yen get hammered. As long as the Bank of Japan continues its yield curve control scheme, it will put downward pressure on the Japanese yen. Ultimately, this is a market that I think continues to see a lot of noisy behavior, but we are a bit stretched at the moment so a little bit of a pullback does make a certain amount of sense.

All things being equal, this is a market that I think continues to make a lot of noise, but you certainly would struggle finding a reason to short this market with any type of gusto or super conviction. Alternatively, this is a situation where if you are patient enough, you should be able to find plenty of value going forward.

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