GBP/JPY Forecast – British Pound Pulls Back Against the Japanese Yen

GBP/JPY Forecast Video for 07.09.23

British Pound vs Japanese Yen Technical Analysis

The British pound has pulled back just a bit during the trading session on Wednesday, as it looks like we are going to continue to consolidate in this situation. All things being equal, the market is likely to continue to look at the ¥185 level, as a potential fulcrum for price. After all, it is a large, round, psychologically significant figure, and a lot of people will pay special attention to it. That being said, we have sliced through this level multiple times, so it does make a certain amount of sense that we would see less importance placed on the level as support and resistance, and just simply more importance placed on it as a potential fair value level.

Regardless, we are very much in an uptrend over the longer term, and I don’t think that changes anytime soon. The 50-Day EMA sits near the ¥182 level and is rising at this point in time, perhaps meeting the market soon to offer its own amount of support. All things being equal, look at dips in the market as a buying opportunity, as the trend will typically last quite some time in the Forex markets. Furthermore, you can even make an argument for a bit of a bullish flag or pennant trying to be formed, but at this point it is still up for debate whether the market is going to do so, or if it just simply continues to be very choppy. I do anticipate that the next couple of days will be very noisy, so therefore be cautious with your position sizing but clearly you cannot be selling this market anytime soon, due to the fact that the interest rate differential alone get you paid to hang onto it.

Underneath, not only do we have the 50-Day EMA offering support, but we also have support at the ¥180 level. The ¥180 level is an area of significant psychological and structural support, so this should be an area that I think a lot of traders will be paying attention to. While we could get a significant pullback, it will more likely than not just be that, a pullback.

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