GBP/JPY Forecast – British Pound Dances Back and Forth Against Japanese Yen

GBP/JPY Forecast Video for 07.08.23

British Pound vs Japanese Yen Technical Analysis

The British pound has gone back and forth during the course of the trading session on Friday, as we continue to look underneath at the ¥180 level as a major floor in the market. With that being the case, it’s likely that we continue to see a lot of buyers on dips, if for no other reason than the massive amount of interest rate differential that you collect by holding this market.

Underneath, the ¥180 level also is being backed up by the 50-Day EMA, and therefore I think you have a lot of technical support in that area. All things being equal, this is a situation where there will be plenty of value hunters. If we break above the top of the candlestick, then it is likely that we go looking to the ¥183.50 level, possibly even the ¥184 level. After that, it’s likely that we test the ¥185 level, which opens up the door for a much bigger move, perhaps all the way to the ¥200 level, which is my longer-term target as things stand currently.

If we were to turn around and break down below the 50-Day EMA, I’m not necessarily going to be selling this market. I think it’s probably only a matter of time before we would see quite a bit of support where we have the bottom of the couple of candlesticks after the recent selloff, and then of course the ¥175 level. The ¥175 level is an area we broke out of, and now should have a lot of “market memory” attached to it.

As long as we can stay above there, it looks to me like the market is going to continue to find buyers, and of course we are in a major uptrend that has been in contact for quite some time. Ultimately, I have no interest in buying the Japanese yen as long as the Bank of Japan continues to see its monetary policy needing to be ultra loose, and there is no sign they are going to change their attitude anytime soon, and it’s probably worth noting that the British just raised interest rates yet again.

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