GBP/JPY Forecast – British Pound Shoots Higher Against the Japanese yen

GBP/JPY Forecast Video for 28.03.23

British Pound vs Japanese Yen Technical Analysis

The British pound has rallied a bit during the trading session on Monday, as we continue to see plenty of relationship between interest rates and the Japanese yen itself. Keep in mind that the Bank of Japan is in a situation where they are trying to keep interest rates to 50 basis points or lower on the 10 year JGB, so this means that the Japanese are going to have to flood the market with more yen, as they print it to buy bonds and keep those rates down.

On the other hand, the market is going to be very positive on the yen if rates continue to fall. All things being equal, the market has also formed a bit of a hammer during the Friday session near the ¥160 level, so that does suggest that there is a certain amount of support underneath, and of course the large, round, psychologically significant figure will be something that people would have paid attention to as well.

At this juncture, it looks like we are going to continue to try to stay in that range that I was talking about last week, between ¥160 and ¥165 above. All things being equal, this is a market that could very well stay in that range for a while, which does make a certain amount of sense that we would see more sideways action due to the fact that the 50-Day EMA is flat, and the 200-Day EMA even more so. With that, I think you just have a lot of noisy behavior ahead, as we are trying to figure out a longer-term trend.

Keep in mind that the market has been very noisy for a while, and the uptrend line underneath is something that should be paid attention to. It’s also worth knowing that the overall attitude of the market continues to be very catty, as there are multiple moving pieces around the world when it comes to the banking sector, inflation, and central bank actions. Furthermore, there are a lot of questions as to whether or not there is going to be global growth, so expect more volatility in the Forex markets, including this pair.

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