GBP/JPY Forecast – British Pound Stabilizes

GBP/JPY Forecast Video for 30.06.23

British Pound vs Japanese Yen Technical Analysis

The British pound has stabilized a bit during the trading session on Thursday, as it looks like we are going to continue the overall uptrend. That being said, we probably have a bit of choppy trading ahead of us, due to the fact that we are so overextended. Markets have a couple of choices when they get a bit parabolic like this, they can either spend time grinding sideways, or pull back. It looks at this point that the British pound may spend more time going sideways than anything else, despite the fact that Wednesday was a very negative session.

Underneath, the ¥180 level of course is a large, round, psychologically significant figure, and an area where a lot of people will be paying attention to. Any pullback to that area probably attracts a certain amount of support that people will be willing to take a look at, but even if we were to break down below there is very likely that the 50-Day EMA, near the ¥175 level, should continue to be a major influence as well. With that being said, I think that is the “floor of the market” at the moment, and therefore I would be surprised to see the market breakdown below there. If it did, then we can start to rethink the entire situation.

That being said, just above we have the ¥185 level offering resistance, from a psychological standpoint. As far as longer-term trading is concerned, I assume that this pair will eventually try to get to the ¥200 level, over the longer-term. I don’t necessarily think that happens easily or right away, but in the meantime, I look at pullbacks as a potential buying opportunity, as the market has proven itself to be so resilient, and of course, the Bank of England has to worry about quite a bit of inflation, while the Bank of Japan is seemingly worried about trying to create more inflation, keeping its monetary policy very loose while its counterpart in London is very tight. Because of this, the swap in this pair continues to be a major driver of this pair going higher. With this, the market continues to see upward pressure in the longer-term, with perhaps the occasional value offering on the dips.

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