GBP/JPY Forecast – British Pound Gives Up Initial Gains

GBP/JPY Forecast Video for 23.08.23

British Pound vs Japanese Yen Technical Analysis

The British pound initially rallied a bit during the session here on Tuesday, but gave back gains to pull back a bit and perhaps offer a little bit of value. At this point, it doesn’t mean that anything has changed, just simply that the market has gotten a little bit stretched. With that being the case, I think you have to look at this through the prism of finding value and taking advantage of “cheap British pounds” when you get that opportunity.

Looking at this chart, I think you have a lot to take in, not the least of which is the fact that we are a little bit stretched. The question now is whether or not we are going to go sideways, or form some type of bullish flag. I think that is very likely the outcome here, so I’ll be looking to get long of this market closer to the ¥185 level. The 50-Day EMA is sitting right around the ¥181 level and rising, which I think would be a significant support level. Underneath there, the ¥180 level is also supported based upon the previous actions that we have seen, and of course the fact that it is a large, round, psychologically significant figure.

In general, this is a market that I think continues to see a lot of noisy behavior, but we are very much in an uptrend, and therefore I just don’t see how you want to short this market anytime soon. This is especially due to the fact that the Bank of Japan is going to keep its monetary policy loose for a very long time from everything that I see, and the interest rate differential does pay you to sit on this pair. Furthermore, you can also look at this through the prism of a historical chart, and it does suggest that perhaps we could go all the way to the ¥200 level before it’s all said and done. Do not get me wrong, the ¥190 level will be a major barrier but there’s nothing on this chart that suggests that we can’t get through that level.

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