GBP/JPY Forecast – British Pound Skyrockets Against Japanese Yen
GBP/JPY Forecast Video for 30.03.23
British Pound vs Japanese Yen Technical Analysis
The British pound has shot significantly higher during the trading session on Wednesday, as we have now broken above the ¥162.50 level. This is an area that looks somewhat important, but there’s an even more important area just above near the ¥165 level. Ultimately, the market continues to move back and forth with the idea of interest rates in Japan, as the Bank of Japan continues its yield curve control. Remember, the Japanese are trying to keep interest rates in the 10 year yield down to 50 basis points or below.
The size of the candlestick is rather impressionable, but at the end of the day we are still very much in a range. However, if we were to break above the ¥165 level on a daily close, then it’s possible we could go to the ¥167.50 level. That being said, at the first signs of exhaustion above here, I would be more interested in shorting this market than buying it, at least for a short term swing trade. The ¥160 level underneath should be a significant support level, and therefore it’s probably worth paying close attention to as a potential bottom. I think at this point, we continue to see a lot of noisy behavior when it comes down to the interest rate situation, and I think that continues to be something that you need to be very cautious with.
Keep your position size reasonable, as the market will remain very noisy as traders are trying to figure out whether or not central banks are actually serious about raising interest rates or not. We have the entire market fighting the central banks, so it will be interesting to see how this plays out, but in the meantime, it certainly means that there’s a lot of danger out there. Speaking of danger, this pair does have a certain amount of correlation to risk appetite, going higher as risk appetite rises, and falling as it struggles. This is especially true now, because if people are truly concerned, the reality is that they will be buying bonds, driving down yields. That’s exactly what the Japanese yen needs to see in order to strengthen due to that yield curve control.
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