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

GBP/JPY Forecast Video for 22.06.23

British Pound vs Japanese Yen Technical Analysis

The British pound rallied early during the Wednesday session but showed signs of hesitation as we wait for clarity with risk appetite. Remember that this pair is parabolic at the moment, and when you get stretched the way we have been, you have a couple of options.

Firstly, you have the proclivity for the market to pull back to give enough value for traders to jump back in, perhaps at a lower level like the ¥177.50 level, possibly even as low as the ¥175 level. The ¥175 level is an area we launched from, and that would be a complete pullback to the beginning of this latest parabolic run. That being said, when the market gets overdone, it needs to pull back for people to feel the necessary “FOMO” to get long at this point.

Secondly, you can get sideways action. At this point, you find some short-term range that you grind through, perhaps using the ¥180 level as support. If that ends up being the case, then you have time to figure out whether or not that’s what’s happening right now, so in other words, at the end of the day, there’s no huge rush to get into this pair to the upside.

If we do just go straight up in the air, then the best thing you can do is use this chart as a secondary indicator with another Japanese yen-denominated pair. For example, you find an underperforming pair like the USD/JPY and start buying that. That being said, keep in mind that there is a Bank of England interest rate decision during the day on Thursday, and a lot of traders will be paying close attention to that, so that might be part of the reason we do get a pullback, offering a bit of value in this pair. All things being equal, the market continues to see more upward pressure than down, so clearly, shorting this market will be very difficult. Ultimately, I’m looking for value that I can take advantage of, or at least consolidation for a while.

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