GBP/JPY Forecast – British Pound Continues to Stretch Higher Against Yen

GBP/JPY Forecast Video for 09.05.23

British Pound vs Japanese Yen Technical Analysis

The British pound has rallied a bit during the trading session on Monday, as it looks like we are going to continue to go higher. The pound has been very strong as of late against the Japanese and, and it’s probably worth noting that the Japanese yen is losing ground against almost everything at the same time. The inflation in the United Kingdom will continue to be a main driver of why the British pound continues to strengthen as well. The interest rate differential between the British pound and the Japanese yen should continue to be very wide, and therefore it’s likely that we would continue to see the pair continue to look to the upside.

Underneath, there is a hammer from the Thursday session that could offer a bit of a floor in the market near the ¥168 level. If we were to break down below there, then it’s likely that the market could go down to the 50-Day EMA. The 50-Day EMA is sitting above the ¥165 level, and is rising. On the upside, we have the ¥172.50 level, which was a major resistance barrier. If the market were to break above there, then it’s likely that the GBP/JPY pair will go looking to the ¥175 level.

It’s very difficult to imagine a situation where the market suddenly sells off, unless of course there is some type of massive economic event. After all, there is a certain amount of risk appetite built into this market, meaning that if traders are willing to take a little bit in the way of risk, they typically favor the British pound over the Japanese yen. All things being equal, this is a market that continues to be a situation where buyers will come and every time it drops, and we are probably going to go to much higher levels over the longer term. That does not mean that it will not be noisy from time to time, but it clearly has a directionality that it prefers, and therefore we will continue to look for buying opportunities as time goes along and aim for much higher levels.

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