GBP/JPY Forecast – British Pound Recovers After Massive Plunge

GBP/JPY Forecast Video for 04.01.23

British Pound vs Japanese Yen Technical Analysis

The British pound has initially tried to rally during the trading session on Tuesday, reaching the ¥158 level before turning around and showing signs of extreme weakness. At one point, the market dropped down to the ¥155 level. The ¥155 level is a large, round, psychologically significant figure, and an area where we have seen quite a bit of action multiple times. That being said, the market has bounced rather hard to show signs of support in that region, and perhaps a market that has reached the bottom of the overall consolidation area. I’m not calling that quite yet, but it is one way that you can interpret this chart.

Even mind this pair is highly sensitive to risk appetite, and of course everything that’s going on in the interest-rate markets when it comes to the Japanese yen. Remember, the Bank of Japan has set a limit on yield in the 10 year note at 50 basis points. In order to defend that, sometimes they have to print tons of Japanese yen to buy those bonds. However, we have seen a lot of pressure release, and the result has been the last couple of weeks.

The British pound on the other hand has been somewhat strong, but seems to be running out of momentum, especially as the US dollar. This gives you an idea of how the British pound is faring against the currency markets in general. Ultimately, I think this is a market that is going to bounce around in this general vicinity for a while, but pay close attention to the ¥155 level as it will be very important.

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