GBP/JPY Forecast – British Pound Has a Wild Ride Against the Japanese Yen

GBP/JPY Forecast Video for 04.09.23

British Pound vs Japanese Yen Technical Analysis

The British pound initially fell a bit during the trading session on Friday, reaching down toward the ¥183 level. The ¥183 level is an area that we have seen a lot of noise previously, and therefore I think the market is likely to continue to see plenty of momentum to the upside over the longer term. Furthermore, you need to keep in mind that the Monday session is Labor Day, so it will have a major influence on liquidity. That being said, it’s more likely than not we go look into the ¥185 level, which is a large, round, psychologically significant figure. Breaking above there opens up the possibility of a move to the ¥187 level, which has been the barrier so far.

If we were to break down below the ¥183 level, then we have to argue with the 50-Day EMA, which of course is a major technical indicator that a lot of people pay close attention to, so I think it’s probably worth recognizing that it could be an area for buyers to get involved. Even if we break down below there, I also think there is a significant amount of support at the ¥180 level as well. Anyway, I have no interest in shorting this market and I do think that it is probably only a matter of time before we see the markets try to take off.

Keep in mind this pair is highly sensitive to the interest rate differential, as the Bank of Japan continues to keep interest rates very low. I believe at this point we need to look at this through a prism of interest-rate differential and getting paid to hang onto the pair, but that doesn’t necessarily mean that it is going to be the easiest pair to own all of the time. Nonetheless, I do think that the buyers will continue to come in and pick things up. It’s also sensitive to risk appetite, so pay attention to whether or not we are going to rally in other markets to give you an idea as to what this one might do.

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