GBP/JPY Forecast – British Pound Drifts Lower Against the Japanese Yen
GBP/JPY Forecast Video for 27.09.23
British Pound vs Japanese Yen Technical Analysis
The British pound has fallen a bit against the Japanese yen during the trading session on Tuesday, showing signs of hesitation. Ultimately, this is a market that should continue to see a lot of noise, as the market will continue to punish the British pound as the United Kingdom looks as if it is heading into a recession. At this point, the market looks as if it is going to try to find support at the ¥180 level, which is a large, round, psychologically significant figure and an area that has been important more than once.
On the upside, we have the 50-Day EMA that offers a certain amount of resistance, and therefore if we break above there, then it’s likely that the market could go racing toward the ¥185 level. All things being equal, we are still very much in an uptrend, and therefore I think it is probably only a matter of time before the uptrend continues, but the question now is whether or not we see some type of fight in the British pound, or if the market just kills time and goes back and forth.
Ultimately, the Bank of Japan continues to try to keep interest rates down, which of course is bad for a currency, and therefore you have to be cautious with trying to buy the Japanese yen. Ultimately, there are better currencies to own against the Japanese yen, but I do think that given enough time the British pound will also benefit from Japanese weakness. That being said, the market had been straight up in the air for quite some time, so this pullback makes sense regardless. Furthermore, you have to look at the massive candlestick from last week as a sign that there’s probably more downward momentum that we still have to get through.
While I am not looking to buy the Japanese yen, I certainly don’t necessarily think it’s time to start buying the British pound against it either. Because of this, I remain neutral in this market for the time being but have more of an upward bias from a longer-term standpoint.
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