GBP/JPY Forecast – British Pound Pulls Back Slightly From 200-Day EMA

GBP/JPY Forecast Video for 21.02.23

British Pound vs Japanese Yen Technical Analysis

The British pound has hesitated near the 200-Day EMA on Monday, as the market has been very noisy to say the least. There is a significant amount of resistance just above, near the ¥162.50 level, and then of course the 200-Day EMA itself. Just underneath, we have the 50-Day EMA, which could come into the picture for support. If we break down below there, then it’s likely that we could drop down to the ¥160 level. ¥160 level is an area that’s been both support and resistance recently, offering the possibility of “market memory” coming into the picture for traders. Anything below there obviously would be negative, but I would anticipate that there should be buyers in that general vicinity.

Because of this, it’s very likely that this remains a “buy on the dip” type of scenario, especially if interest rates start to rise around the world again. Keep in mind that the Bank of Japan is doing everything he can to keep interest rates down, which means they are buying Japanese Government Bonds, trying to keep the 10 year yield below or at 50 basis points. This is the same thing as printing currency, which is flooding the market with the Japanese yen, something that moved the market quite drastically last year.

If we do break down below the ¥160 level, then it’s likely that we could go down to the ¥157.50 level, where we had bounced from a couple of times. Either way, I would expect a lot of choppy and noisy trading, as the volatility is probably going to get much more drastic going forward. It’s probably worth noting that North American banks were closed for Monday, so it was only essentially ½ of a day of normal trading.

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