GBP/JPY Forecast – British Pound Has Choppy Day Against the Yen

GBP/JPY Forecast Video for 24.03.23

British Pound vs Japanese Yen Technical Analysis

The British pound has gone back and forth against the Japanese yen during trading on Thursday as we continue to see a lot of choppy behavior in this pair. We are trading just below the 50-Day EMA and the 200-Day EMA indicators, which are extraordinarily flat. This suggests that we are going to continue to see a lot of back-and-forth sideways consolidation, and therefore I think that we need to employ range bound systems.

Underneath, the ¥160 level has been tenacious in its support of the market, but we also have seen a lot of selling pressure once you get to about ¥163. After that, the ¥165 level above is also a major resistant barrier, so I do think that the move higher is going to be difficult, but I don’t necessarily think that the buyers are going to give up. In other words, I think you continue to see a lot of back-and-forth sideways action, showing signs of noise and destruction of accounts for traders who try to put too much into the market at one point.

It’s worth pointing out that we are in the middle of the huge wipeout candlestick from December, when the Japanese announced that they were going to allow the 10 year JGB to float from 25 basis points to 50 basis points, and since then we have seen the Japanese yen at least hold its own. It’s also worth noting that the Japanese yen continues to be the epicenter of carry trading, which is when you buy one currency that pays more and swap than the other. This is part of the reason why it has yet to overcome a lot of its weakness against currency such as the British pound, despite the fact that the British pound has been a bit lackluster.

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