Advertisement
Advertisement

GBP/JPY Forecast – British Pound Threatens a Major Breakout

By:
Christopher Lewis
Published: Apr 28, 2023, 13:25 UTC

The British pound has been rallying rather significantly during the trading session on Friday, reaching the ¥170 level.

British Pound, FX Empire

In this article:

GBP/JPY Forecast Video for 01.05.23

British Pound vs Japanese Yen Technical Analysis

The British pound has rallied rather significantly during the trading session on Friday, reaching the ¥170 level, a large, round, psychologically significant figure that a lot of people will be paying close attention to. After all, the market has been very strong for a while, but it’s also been very choppy. Now that the Japanese have reiterated their desire to have yield curve control going forward, it suggests to me that the Japanese yen will continue to suffer at the hands of other currencies. This will be especially true in currencies that currently are having quite a bit of monetary tightening going on behind them.

If we can break above the ¥170 level, the British pound is likely to continue to go much higher against the Japanese yen, and I think this is probably more likely than not. I would anticipate the pullbacks at this point in time continue to get bought, and if we are so close to 170, I would anticipate a certain amount of profit-taking. Nonetheless, I would not short this market due to the fact that the momentum is so clearly to the upside, and is difficult to imagine a situation where you would be comfortable in that trade at all. Unless the Bank of Japan completely changes its overall monetary policy, I just don’t see how this market breaks down significantly. At this point, the ¥167 level is probably supported, and most certainly the ¥165 level is as well.

The 50-Day EMA is near the ¥165 level, and is approaching the level and getting ready to break higher, so that should be another reason to think that there is plenty of support in that area. Nonetheless, candlestick like we have seen on Friday very rarely happens in a vacuum, although we would not be surprising at all for some traders out there to start taking profit heading into the weekend, instead of sitting on a lot of risk. Ultimately, the market looks as if it is going to continue to punish the Japanese Jen, and now it looks as if we are going to continue to go much higher, but that does not necessarily mean it has to happen immediately.

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

About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

Did you find this article useful?

Advertisement