GBP/JPY Forecast – British Pound Rallies Toward Top of Range Against Japanese Currency

GBP/JPY Forecast Video for 11.04.23

British Pound vs Japanese Yen Technical Analysis

The British pound initially pulled back just a bit during the trading session on Monday, but then turned around to show signs of strength as the Japanese yen started to lose strength against currencies across the board. It’s worth noting that we are getting close to the top of the overall range, with the ¥166 level offering a significant resistance barrier. That being said, the market is more likely than not going to be very noisy and have to deal with a lot of selling pressure just above.

If we do pull back from here, the 50-Day EMA sits near the ¥162.50 level, and has recently just crossed above the 200-Day EMA. Ultimately, this is a market that looks as if it will find plenty of buyers on dips, based upon the recent action that we have seen in this market, and therefore I think it’s more or less going to be a situation where you will be looking for buying opportunities. However, the market is likely to continue to see a lot of risk appetite moves, so I think at this point you will probably have to count on a lot of volatility more than anything else. With this, I think you need to be cautious with your position sizing, but if and when we can break above the shooting star that we formed last week, then I think the market has more of a shot of going “buy-and-hold.”

If we were to break down below the moving averages, then it opens up the possibility of a move to the ¥160 level underneath, which is an area that is previous support, and of course is a large, round, psychologically significant figure that will make for good headlines. However, it’s probably worth noting that the most recent pullback was much shallower than the previous one suggesting that more pressure is building to the upside than anything else in this pair. If interest rates start to rise, keep in mind that the Bank of Japan continues its yield curve control policy, thereby putting a lot of pressure on the Japanese yen.

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