GBP/JPY Forecast – British Pound Pulls Back to Break Below 170 Against the Yen

GBP/JPY Forecast Video for 04.05.23

British Pound vs Japanese Yen Technical Analysis

The British pound has fallen a bit during the trading session on Wednesday, as we have broken below the ¥170 level again. That being said, the market is likely to see a lot of buying pressure underneath, and I think it’s probably only a matter of time before we turn around and go to the upside. With this being the case, the market is likely to continue to see a lot of volatility, but after that massive shot higher, one would have to see a little bit of a pullback in order to offer value.

I think at this point, that’s exactly what’s going on, so I would be very patient and wait to see whether or not we get a supportive looking candlestick. The ¥169 level was an area of importance, and therefore should be again if we turn around and show signs of strength. Alternatively, the 50-Day EMA sits at the ¥165 level, as it is going to be a technical analysis version of a floor, and therefore I think a lot of traders will be paying close attention to it.

On the other hand, if we were to turn around and break above the recent high, then I think the British pound will more likely than not will continue to go toward the ¥175 level. On the other hand, if we do break down below the ¥165 level, then the market would break down rather significantly. Keep in mind that the Bank of Japan continues to see a reason to keep interest rates lower, therefore it will continue to see quite a bit of negativity on the Japanese yen, therefore I think we’ve got a situation where traders will continue to buy other currencies against it. Furthermore, you need to keep in mind that the British pound continues to see a lot of upward pressure due to the fact that inflation has been so strong in the United Kingdom.

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