GBP/JPY Forecast – British Pound Recovers Against Yen

GBP/JPY Forecast Video for 07.04.23

British Pound vs Japanese Yen Technical Analysis

The British pound has found itself dipping a bit during the course of the trading session on Thursday, but then turned around as we found buyers step into the market yet again. Keep in mind that the Bank of Japan continues to see the need to keep interest rates down, and therefore they have been printing yen and buying bonds every time they start to rise. Furthermore, the British pound has been one of the better performers around the world, so it all lines up for a market that should be bullish.

However, you should also keep an eye on the ¥165.50 level, where we had seen significant selling pressure previously, or we had formed a bit of a shooting star, not only on Tuesday, but several weeks back. In other words, I think that’s an area that is in general going to be difficult. However, if we were to break above that area then it opens up a potential move to the ¥169 level. On the other hand, if we turn around and break down below the bottom of the candlesticks for the last couple of days, then you have the 50-Day EMA and the 200-Day EMA indicators sitting just below. In that area, you would have quite a bit of technical support so it will be interesting to see how that plays out. Anything below that area would obviously attract a lot of attention, and traders would probably be aiming for the ¥160 level.

Regardless, this is a market that will continue to be very noisy, and I think that’s something that you will just have to come to terms with. That is typically the case with this pair, but we also have a lot of volatility in general around the Forex world. Ultimately, you will have to be very flexible and keep your position size reasonable, as we could find ourselves in trouble rather quickly. The yields in Japan will have to be paid close attention to, as it will continue to cause major volatility at times and this pair and all other yen related pairs going forward. The yield curve control game is by far the biggest game in town at the moment.

For a look at all of today’s economic events, check out our economic calendar.