GBP/JPY Forecast – British Pound Stabilizes Against Yen

GBP/JPY Forecast Video for 25.08.23

British Pound vs Japanese Yen Technical Analysis

The British pound has stabilized a bit against the Japanese yen during the trading session on Thursday, after the brutal selloff on Wednesday. At this point in time, I think this is still a very bullish market given enough time, but we also need to recognize that it’s not going to be a shot straight up in the air. After all, it’s going to take some type of clarity about interest rates around the world, and of course what’s going on in the United Kingdom as the PMI numbers were so horrible during the Wednesday session. However, inflation really is a slippery slope to try to trade, because it seems like we have “rolling inflation” globally.

On the other hand, the Bank of Japan continues to see reasons to keep interest rates ultralow, and as long as that’s going to be the case, it’s difficult to imagine a scenario where people want to own the Japanese yen. After all, the interest rate differential is huge, and it does not look like it’s going to change anytime soon. With that, I think you have to look at this through the prism of a market that is trying to find its footing and return to the overall uptrend that we have been in for ages. There is a major reason why the market continues to be in an uptrend, which of course is that you get paid to hold this position at the end of the day. Think of it as a dividend for stocks, it means that it is more of an investment for people than a short-term trait most of the time.

If we can overcome the ¥185 level, then it’s very likely that this market really starts to take off, perhaps reaching toward the ¥187 level. If we break down below the bottom of the Wednesday candlestick, then it’s possible that we could drop down to the ¥182.50 level, which is basically where the 50-Day EMA is hanging about. We are still very much in an uptrend, so I still like the idea of buying dips to find value along the way. However, I expect the next 24 hours with the Jackson Hole Symposium speech to be a very noisy timeframe.

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