GBP/JPY Forecast – British Pound Runs Into Its Ceiling

GBP/JPY Forecast Video for 02.05.23

British Pound vs Japanese Yen Technical Analysis

The British pound has rallied a bit during the early hours on Monday, as we continue to reach higher against the Japanese yen. That being said, we did offer a little bit of resistance above the ¥172 level, and it looks as if the market is perhaps just a bit exhausted. Nonetheless, that doesn’t necessarily mean that you should be a seller of this market, just that you may be able to get a better price on some type of pullback. Ultimately, the market opens up the possibility of finding value in that situation, something that you should always be looking for anyway.

The massive candlestick from Friday certainly leads the market higher over the longer term more likely than not, as those candles very rarely happen in some type of vacuum. With that, I think the ¥170 level might be an area where we can see a certain amount of support, as it was a large, round, psychologically significant figure, and an area that previously has been a bit of a ceiling in the market. In fact, it’s not until we break down below the massive candlestick that I would consider this market being threatened. In fact, we could drop 50% of that candlestick and it would be very normal in this type of environment.

On the other hand, if we were to break above the top of the candlestick during the trading session on Monday, the market is likely to go looking to reach the ¥172.50 level, possibly even to the ¥175 level after that. Ultimately, this is a market that is very bullish, especially as the Japanese yen continues to get hammered by the yield curve control policy, as the Bank of Japan will continue to print Japanese yen in order to keep those bond yields down by buying them. Ultimately, I think the only thing you can probably count on is going to be a bit of volatility, but I still think there is plenty of support underneath that should come into the picture, and therefore lift the markets on any type of selloff in the near term.

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