GBP/JPY Forecast – British Pound Races Higher Against Japanese Yen

GBP/JPY Forecast Video for 01.11.23

British Pound vs Japanese Yen Technical Analysis

The British pound has rallied significantly during the trading session on Tuesday as the Bank of Japan has flinched overnight. They have only suggested that perhaps they are going to relax the interest rate yield curve control but haven’t made any concrete plans. Because of this, we have seen the Japanese yen sold off across the board, so the British pound got a little bit of a reprieve from that in general. After all, the British pound hasn’t necessarily been strong during the day against most other currencies, but the Japanese yen is a special situation at the moment.

The ¥183.50 level is a massive barrier that we have tried to break over the last couple of weeks. If and when we do, it opens up the possibility of a move to the ¥185 level, possibly the ¥186.50 level. At that point, you should pay attention to what the Japanese yen is doing against multiple currencies, because this pair may go higher just due to the fact that the Japanese yen itself is so weak. It may not have much to do with the British pound itself.

All things being equal, I am a buyer of dips and I do think that this market probably pulls back after this type of move. Nonetheless, the ¥180 level underneath continues to be a massive support barrier, and I think that it’s only a matter of time before the market would look at that as a nice buying opportunity. If we were to break down below that level, then it’s obvious that the market would be in some trouble, but right now I don’t see how the Japanese yen will strengthen for a bigger move. Ultimately, this is a market that continues to see a lot of volatility, and therefore I think it is a market that you need to be somewhat cautious. However, the market clearly has more of an upward trajectory than anything else, so ultimately this is a market that continues to see an attempt to punish the Bank of Japan and its yield curve control policies.

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