GBP/JPY Forecast – British Pound Shows Impulsive Momentum

GBP/JPY Forecast Video for 05.04.23

British Pound vs Japanese Yen Technical Analysis

The British pound has rallied significantly during the trading session on Tuesday to breakout to a fresh, new, high. The market has broken above the ¥166 level, and now is threatening the top of the major wipeout candlestick after the Bank of Japan announced that they were going to allow the 10 year JGB to rise to 50 basis points instead of 25. Now that we have made a complete “round-trip”, it suggests that the Japanese yen will continue to lose ground against most currencies. This currency pair had been a bit of a laggard until the last couple of days, and now looks as if it’s ready to lead the charge against the Japanese yen.

That being said, the market is entering an area that is very noisy, so I don’t think that it’s simply going to take off to the upside. That being said, as long as we can stay above the ¥164 level, then it’s likely that we could have buyers on dips going forward. Alternatively, you should also pay attention to the fact that the 50-Day EMA is starting to shift to the upside, breaking above the 200-Day EMA. The so-called “golden cross” is an indicator that a lot of longer-term players in the market watch, but it’s also worth noting that the moving averages had been flat previously, so it’s still a little early to call for some type of longer-term breakout.

Going forward it’s more likely than not going to be a situation where you’re looking for value, and of course paying attention to interest rates. As they rise, the Japanese yen takes it on the chin, as the Bank of Japan continues its yield curve control monetary policy. Keep in mind that this pair is somewhat turbocharged compared to many others, so even if you aren’t trading this one, and gives you a good idea as to where other yen related pairs might be going. In other words, you could think of it as a secondary indicator in a market that is all about interest rates at the moment. Furthermore, the market has formed a very strong looking candle, so it does suggest that there’s probably plenty of interest.

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