GBP/JPY Forecast – British Pound Takes Off Against Yeah

GBP/JPY Forecast Video for 24.07.23

British Pound vs Japanese Yen Technical Analysis

The British pound has taken off against the Japanese yen overnight, as the markets are looking at the ¥180 level as massive support. Furthermore, the Bank of Japan seems to show no real interest in trying to do anything to combat a weakening currency, or perhaps better put, they don’t have any interest in tightening monetary policy. While the bank of England continues to fight massive inflation in the United Kingdom, the sets up a bit of a “perfect storm” in this currency pair.

One glance at the longer-term chart can tell you just how bullish this market has been, and I just don’t see anything to keep it from going to the highs again. It is currently around the ¥184 level, an area that has been massive resistance. Nonetheless, I do think that we break above there and eventually go look into the ¥185 level, which is the real prize. Clearing that then opens up a move to the ¥187.50 level, followed by the ¥190 level.

At this point, if we were to break down significantly, and clear the ¥180 level on a daily close, albeit very unlikely, that could open up a move down to the 50-Day EMA which is currently sitting right around the ¥178 level. I do believe that this market goes higher over the longer term based on interest-rate differential, and of course you get paid to hold it. I have no qualms about going long in this pair, and quite frankly have no reason whatsoever to start selling it.

The only way that I would start shorting this market is if the Bank of England was specifically getting more dovish, and even then I think you’d have to be somewhat cautious because of the huge interest rate differential. Quite frankly, this is a market that seems hell-bent on going higher and therefore there is no real reason to fight that momentum. If you were to buy the Japanese yen, in other words try to short a yen related pair, the British pound is not going to be the currency to do it against.

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