GBP/JPY Forecast – British Pound Takes Off Against The Yen

GBP/JPY Forecast Video for 06.11.23

British Pound vs Japanese Yen Technical Analysis

The British pound initially pulled back a bit during the trading session on Friday, but then took off to the upside as it looks like risk appetite is coming back into the market. All things being equal, this is a market that every time we pull back, buyers will come in and pick up British pounds as the interest rate differential is so strong between the 2. The ¥185 level above is a large, round, psychologically significant figure that you need to pay close attention to, and it is an area that previously has caused major issues.

The 50-Day EMA sits just below the hammer from the Thursday session, offering significant support. If we were to break down below that level, then it’s likely that we could drop down to the ¥181 level, but with the recent move being so strong, it’s likely that we will continue to find buyers regardless of what happens next. With this, I like the idea of getting involved in the market and trying to take advantage of the massive interest rate differential and get paid at the end of every day.

Ultimately, I think if we can break above the ¥186.50 level, then we have a real shot at taking off to the upside, perhaps reaching as high as ¥190, and then eventually ¥200. Ultimately, I think that the Bank of Japan is light years away from tightening its monetary policy, and despite the fact that they have bombed the markets a bit, the reality is that they really don’t have much of a chance of strengthening their currency anytime soon, and at the end of the day that will be the only thing that matters.

Furthermore, it’s worth noting that the market has seen quite a bit of strength during the day as the candlestick is somewhat large. Because of this, I think it’s a situation where eventually momentum is going to overwhelm the market, and we continue to find plenty of buyers in a market that has been bullish for months. I have no interest in trying to fight this trend, and I will look at each step as a potential buying opportunity as things stand right now.

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