GBP/JPY Forecast – British Pound Pulls Back Against Yen

GBP/JPY Forecast Video for 21.08.23

British Pound vs Japanese Yen Technical Analysis

The British pound has fallen during the trading session on Friday, as it looks like we are testing the ¥185 level. The ¥185 level is an area that a lot of people will pay attention to due to the fact that it is a large, round, psychologically significant figure. Now that we are dropping toward that area, it makes a lot of sense that we would see a bit of “market memory” coming into the picture, therefore I think we have a situation where the buyers could come back into this market again. That being said, the market is likely to continue to see a lot of noisy behavior, but I think given enough time we will eventually go reaching to the upside again. After all, the interest rate differential between the 2 currencies continues to be a mile wide, and a lot of people will continue to look toward the British pound to collect that swap at the end of the day.

At this point, it’s just a matter of trying to find some type of support candle that I can jump on, and I am more than willing to do so as soon as we bounce. If we recapture the ¥185 level, then I am a buyer of even more, because longer term, this is a market that I think is looking to the ¥200 level. I doesn’t mean that it happens overnight, and I do recognize that is going to be a situation where the market sees the occasional pullback that should be thought of as value. The 50-Day EMA is near the ¥181 level, and is rising. I think that a lot of traders will be paying close attention to the 50-Day EMA, as is the norm.

The Bank of Japan continues to keep the monetary policy loose coming out of Japan, and therefore the value the Japanese yen will continue to plummet in general. All things being equal, this is a market that I think continues to be a “one-way trade”, but I also recognize that there will be the occasional noisy behavior that you need to pay attention to, but any pullback should be thought of as an opportunity.

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