GBP/JPY Forecast – British Pound Dips Against the Yen

GBP/JPY Forecast Video for 12.09.23

British Pound vs Japanese Yen Technical Analysis

The yen related pairs all gapped lower to kick off the trading week, and of course is GBP/JPY pair was no different. Ultimately, this comes down to the Bank of Japan Gov. Ureda suggesting that the Bank of Japan might be able to step away from negative interest rates by the end of the year based on employment numbers and more data that they have coming. However, that is very unlikely to actually be the case, and you are already starting to see traders pushback against that idea, as the Europeans came in and started buying the British pound against the Japanese yen as soon as the Asians gave up the market. Quite frankly, I think that was a knee-jerk reaction that a lot of people are going to be taking advantage of, and therefore you have to look at and through that prism.

The 50-Day EMA has offered significant support, and therefore I think technical traders will also be paying close attention to this as well. The ¥183 level is an area that previously had been resistance, so that all ties together quite neatly. Ultimately, I think this market will continue to see a lot of noisy behavior, but given enough time, I think we’ve got a situation where the buyers will continue to jump in over the longer term, and therefore I do believe that we go back to the ¥185 level given enough time, and then perhaps a move above there.

If we break down below the 50-Day EMA, then it’s possible that we could go down to the ¥180 level. All things being equal, this is a situation where the market is going to be very noisy, but I think given enough time, there will be plenty of value hunters out there willing to jump all over this market, and therefore I think you have to look at this through the prism of trying to take advantage of value as it occurs. It most certainly seems to be trying to do so now, so it will be interesting to see how this plays out.

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