GBP/JPY Forecast – British Pound Hanging On to Support
GBP/JPY Forecast Video for 05.12.22
British Pound vs Japanese Yen Technical Analysis
The British pound has fallen rather hard against the Japanese yen during the trading session on Friday and breaking down below the ¥165 level had buyers step back into the market to try to pick things up, so it’s interesting to see how this has played out. Ultimately, I think this is a situation where we are trying to hang on to the uptrend, which does make a certain amount of sense considering that the Bank of Japan continues to fight rising rates as hard as they can. With that being the case, I think you get a situation where the yen will continue to be fairly weak.
Recently, we have seen yields drop around the world, and that does relieve some of the pressure on the Bank of Japan, so it does make a certain amount of sense that the yen has fought back. Furthermore, you have the Bank of England talking about a two-year recession, so it also probably weighs upon the strength of the British pound.
That being said, the world is essentially shorting the yen every time they can, so I do think we’ve got a situation where the market will continue to be very noisy, and therefore I think you get a situation where the volatility will continue to be a major problem, but at the same time you will clearly continue to see buyers on dips until something structurally changes. It’s been rather ugly as of late, but it still favors the upside overall. Quite frankly, if the markets continue to the way they have, I think you will just see more volatility and choppy behavior than anything else.
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