GBP/JPY Forecast – Pound Continues to See Hesitation

Christopher Lewis
Published: Sep 18, 2023, 13:44 GMT+00:00

The Pound continues to see a longer-term uptrend against the Yen, but in the short-term, looks like the sellers are back.

British Pound bills, FX Empire

In this article:

GBP/JPY Forecast Video for 19.09.23

British Pound vs Japanese Yen Technical Analysis

The British pound recently experienced a modest rally during Monday’s trading session, followed by a partial retracement of its gains. In this context, the 50-Day Exponential Moving Average, positioned below the market, provides support, indicating the potential for a rebound that could drive the currency pair toward the ¥185 level. A further breakthrough above this level would direct the market’s focus towards the ¥187 level, a zone that has previously exhibited resilience as a resistance area. Overall sentiment leans toward a bullish outlook for this market, albeit amidst recent episodes of volatility.

The long-term trajectory of the Japanese yen remains uncertain, but there is a plausible scenario in which the British pound continues to appreciate against the yen, potentially reaching the ¥200 level. It’s important to note that such an ascent may not occur immediately, and periodic significant pullbacks may be part of the journey. The market’s movement continues to pivot around interest rate differentials, a factor that generally favors assets denominated in currencies other than the Japanese yen. While the Pound’s strength against other currencies may vary, it’s challenging to envision the Yen as a strong currency against the GBP.

In the event of a breach below the 50-Day EMA, the ¥180 level emerges as a notable support area, establishing a foundation for price movements. Currently, it can be regarded as the “floor” in the short-term market dynamics. As long as this level remains intact, the scenario remains conducive to a potential upswing. However, it’s important to recognize that changing the overall trend of a currency pair typically requires a prolonged timeframe. In the short term, the likelihood of such a trend reversal appears limited, unless a significant shift occurs in the Bank of Japan’s monetary policy stance.

In conclusion, the British pound displays an inclination for gains against the Japanese yen, supported by the 50-Day EMA. Interest rate differentials underpin the market’s trajectory, favoring the British pound over the yen. While periodic volatility is expected, the bullish sentiment endures. The path ahead may involve fluctuations, but the potential for the British pound to appreciate remains, with a longer-term target of ¥200. Recognizing that altering the overall trend takes time underscores the importance of a patient and vigilant approach in navigating this currency pair.

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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.

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