GBP/JPY Forecast – Pound Continues to See Overhead Pressure Despite Uptrend

GBP/JPY Forecast Video for 28.06.23

British Pound vs Japanese Yen Technical Analysis

In Tuesday’s trading session, the British pound initially attempted to rally against the Japanese yen but quickly relinquished its gains. While this may not indicate a significant shift in the market, it suggests a possible overextension. Notably, the ¥180 level holds potential as a supportive barrier due to its psychological significance and recent history of providing substantial support. However, if the market breaches this level, the next important monitoring levels are ¥177.50, followed by ¥175. The 50-Day Exponential Moving Average is rapidly approaching the ¥175 level, likely to serve as a critical support level.

On the upside, the ¥183 level poses a short-term resistance point and target. However, it is only a matter of time before this resistance will likely be overcome. The significant interest rate differential between Great Britain and Japan makes this currency pair appealing to traders seeking to capitalize on swap opportunities.

Currently, selling the British pound against the Japanese yen is unattractive, as there are no compelling reasons to do so. Unless there is an imminent shift in Japan’s monetary policy, which seems unlikely in the near term, traders will likely continue favoring buying this pair. While Japanese officials occasionally express concerns about sharp movements in the forex markets, these remarks are generally perceived as mere lip service. Consequently, any significant sell-off following statements from Tokyo is likely to be viewed as a favorable buying opportunity. The prevailing trend is expected to persist, and it is plausible that this currency pair could reach the ¥200 level in the long term, potentially by the end of the year.

However, it is important to note that occasional pullbacks and periods of volatility can be expected. While the overall trend remains intact, the market cannot go straight up in the air forever. As a result, traders should be prepared for volatility in the pair.

In conclusion, the British pound faced resistance against the Japanese yen after a brief rally, indicating a potential overextension in the market. The ¥180 level holds significance as a support level, while further downside targets include ¥177.50 and ¥175. On the upside, the ¥183 level poses a short-term resistance, but its eventual breach is anticipated. The substantial interest rate differential between the two currencies supports the continued buying interest in this currency pair. Traders should remain vigilant for potential fluctuations while acknowledging the prevailing upward pressure in their analysis.

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