GBP/JPY Forecast – British Pound Gives Up Early Gains Against the Japanese Yen

GBP/JPY Forecast Video for 28.04.23

British Pound vs Japanese Yen Technical Analysis

The British pound has initially tried to rally during the trading session on Thursday but gave bank gains as we continue to see a lot of noise in the general vicinity. Ultimately, this is a situation where the market continues to see a lot of noise, and confusion. Keep in mind that this pair is highly sensitive to risk appetite, so that does make a lot of sense as there are major concerns around the world as far as interest rates are concerned, and perhaps more importantly, global growth or a lack of.

The ¥165 level underneath continues to see a bit of support, especially now that the 50-Day EMA is coming into the picture, which of course is a technical indicator that a lot of technical traders will use. It’s also worth noting that the ¥165 level has previously been supported, and of course, it is a large, round, psychologically significant figure. This will attract a lot of attention, as it typically does.

Looking at this chart, it’s obvious that the area near ¥168 is very difficult to get above, and if we can break above all of that, then it’s possible that we could see the market reach the ¥170 level. Breaking above there, then becomes more of a “buy-and-hold” situation, as this market will then be free of a lot of resistance.

A lot of back and forth would be expected over the next several weeks, as we simply are trying to figure out what is going to happen with global growth. I do think there are a lot of issues out there, but at the same time you have to keep in mind that the Bank of Japan continues its yield curve control program, keeping the absolute top of yields for the 10-year GDP at 50 basis points. In other words, they are going to print more currency if interest rates rise, which is exactly what caused the Japanese yen that was so much strength last year. Ultimately, this is a situation where the market will probably continue to be very noisy, but I do think that it is more of a “buy on the dip” type of field of this market.

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