GBP/JPY Forecast – British Pound Sits Still

GBP/JPY Forecast Video for 10.10.23

British Pound vs Japanese Yen Technical Analysis

The British pound has done very little during the trading session on Monday, as we are sitting just below the 50-Day EMA. The 50-Day EMA of course is a major technical indicator that a lot of people will be paying attention to, and therefore it’s not overly surprising to see that we are just hanging around. Underneath, I see the ¥180 level as a major support level, so it will be interesting to see how that plays out. All things being equal, this is a market that I think is going to continue to find buyers based on what the Bank of Japan is doing, meaning that it is keeping its interest rates extraordinarily low.

The United Kingdom has its own issues, so that’s part of what’s going on here as well. After all, if the European Union enters a recession, it almost certainly will drag the United Kingdom right along with it. Because of this, the British pound has underperformed for a while, and even though the Bank of Japan is going to do nothing to keep interest rates elevated, there is still a bit of hesitation to own the British pound in general. While I am a buyer of yen related pairs on dips, this one might underperform any of the others out there just due to the British pound and its lackluster momentum. On the other hand, if we do break above the highs from last week, then I think this market has the ability to go looking to the ¥185 level above, which is a major target above and a major resistance barrier that we have tested as of late.

The only thing I can count on in this pair is going to be a lot of volatility but considering everything that’s going on in the world right now, I think you could probably say that with most markets, not just this one. Position sizing will be crucial, so don’t get overly exposed as you could find yourself in serious trouble rather quickly. I’m still bullish, but only slightly in this pair and I anticipate that we probably consolidate more than anything else over the next couple of weeks.

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