GBP/JPY Forecast – British Pound Continues to See Buyers Against Japanese Yen

GBP/JPY Forecast Video for 08.11.23

British Pound vs Japanese Yen Technical Analysis

The British pound continues to fight right around the ¥185 level against the Japanese yen, a currency that of course has its own issues. After all, the Bank of Japan is doing everything it can to keep interest rates down, which is negative for the currency itself. Given enough time, I do think this is a situation where the market will eventually try to break above the high of the shooting Star candlestick for Monday, opening up the possibility of an attack on the recent highs near the ¥187 level. In that environment, I fully anticipate that the Japanese yen will be eviscerated against almost everything, not just the British pound.

As things stand right now, I think that every time this market dips, you have to be looking for an opportunity to pick up “cheap British pounds” against what is undoubtedly one of the weakest currencies in the world. The Bank of Japan has done absolutely nothing to tighten its monetary policy, and is light years away from being able to do so. Because of this, I do believe it is probably more likely than not that we do eventually break out to the upside and go looking to the ¥190 level. We have a long way to go before we get there, but we are building up the necessary inertia at the moment.

It’s also worth noting that UK gilts rose 7 basis points overnight, showing that rates are continuing to rise in the United Kingdom, which obviously helps this pair go higher as well. Because of this, I think you have a situation where it’s more back-and-forth than anything else, with an upward bias. I don’t have any interest whatsoever in trying to short this market, because quite frankly the Japanese yen is the last currency that I would think about owning in this market environment. Until the Bank of Japan changes its overall attitude, there’s just no way to buy this pair or anything else related to the Japanese yen. Ultimately, I do think that we break out and go much higher over the longer term. The “floor in the market” is closer to the ¥180 level.

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