GBP/JPY Forecast – British Pound Pulls Back Against Yen

GBP/JPY Forecast Video for 27.06.23

British Pound vs Japanese Yen Technical Analysis

The British pound initially tried to rally a bit during the trading session on Monday, but gave back gains rather quickly against the Japanese yen. I don’t necessarily think this is the beginning of anything important, rather than the market may be a little overdone. The ¥180 level underneath could be supportive, as it is a large, round, psychologically significant figure and an area where we have seen a significant amount of support recently. If we can break it down below there, the market could go down to the ¥177.50 level, followed by the ¥175 level. The 50-Day EMA is racing toward the ¥175 level, so I think that is the absolute “floor in the market.”

On the upside, the ¥183 level seems to be short-term resistance, but I think it’s probably only a matter of time before we turn around and take that out. After all, the interest rate differential between Great Britain and Japan is extraordinarily wide, so traders will continue to buy this pair to take advantage of the swap.

There is no situation where I’m interested in selling this pair, and that will probably continue to be the case until the Japanese change their monetary policy, something that does not look very likely to happen anytime soon as they continue to reiterate their desire to keep monetary policy loose. Yes, occasionally, they complain about “sharp moves in the Forex markets,” but that is nothing but lip service, and therefore any sharp selloff after a statement coming out of Tokyo will almost certainly end up being a nice buying opportunity.

I do believe that this trend will continue, and it’s likely that we could see this pair go all the way to the ¥200 level over the longer term, perhaps even by the end of the year. That being said, there will be the occasional pullback so it’s likely that we will continue to see buyers come in and take advantage of a dip in what is such an obvious strong trend. That being said, we cannot go straight up in the air forever, so be prepared that there will be some volatility from time to time.

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