GBP/JPY Forecast – British Pound Pulls Back Against Yen

GBP/JPY Forecast Video for 15.09.23

British Pound vs Japanese Yen Technical Analysis

The British pound has pulled back a bit against the Japanese yen during trading on Thursday, as we continue to see a bit of consolidation above the 50-Day EMA, an indicator that a lot of people will be paying close attention to. Because of this, I think it’s probably only a matter of time before we have to build up some type of momentum, but right now it just doesn’t look like we have it. Ultimately, this is a situation where we will probably see this pair move right along with risk appetite and of course interest rates, which of course are all over the place.

Keep in mind that the Bank of Japan continues to keep ultra-loose monetary policy, and that is a major influence on all yen related pairs. The British pound on the other hand offers a sizable swap for holding it against the Japanese yen, creating a bit of a “floor in the market” going forward. Until the interest rate differential situation changes, there’s just no significant reason to get short of this pair.

Even if we were to break down below the 50-Day EMA, I suspect there is a significant amount of support at the ¥180 level, an area that is not only a large, round, psychologically significant figure, but also an area where we have seen action previously. As long as that remains the case, I read this chart as one that suggest you should be buying all dips going forward, but you don’t necessarily want to jump into it with a huge position. After all, this pair is volatile under the best of circumstances, and right now we are most certainly not in the best of circumstances.

The ¥185 level will continue to be important resistance, so do keep an eye on that. If we can break above there again, then we will threaten the highs again, perhaps opening up the door toward the ¥200 level which is my longer-term target. Historically speaking, the British pound has hit the ¥200 level multiple times, so would not be anything new that has happened in this pair.

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