GBP/JPY Forecast – British Pound Pulled Back to Test Support

GBP/JPY Forecast Video for 02.01.23

British Pound vs Japanese Yen Technical Analysis

The British pound has fallen a bit during the trading session on Friday, as we continue to threaten the ¥159 level. This is an area that of course is going to cause a bit of support based upon what we have seen recently, so it does make a certain amount of sense that we see it tested again. At this point in time, if we break down below the ¥158 level, then we could really start to take off to the downside. More likely than not, we will probably see some type of short-term bounce that we can get involved in, and therefore start fading on signs of exhaustion. I think that the ¥162 level above could be a bit of the ceiling, especially near the 200-Day EMA.

Keep in mind this pair is highly sensitive to risk appetite, therefore you need to pay close attention to that, but also we have to worry about the volume out there because quite frankly most people are not trading. The recent selloff has been brutal, and it’ll be interesting to see if we can get any type of follow-through. If we do, it could be the end of the selling of the Japanese yen for a while.

That being said, you can only read so much into the last couple of days due to the fact that we have no real volume. The markets will continue to be very noisy and choppy, but I also think that we probably have a scenario where we have to look at this through the prism of realism because most people aren’t even paying attention. If we do get some type of noisy headlines come out, that could cause chaos, but right now I’m not looking for it.

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