GBP/JPY Forecast – Pound Pulls Back Against Yen to Kick Off Week

GBP/JPY Forecast Video for 25.07.23

British Pound vs Japanese Yen Technical Analysis

The British pound has pulled back just a bit during the trading session on Monday against the Japanese yen, but we are still very much in a consolidation area, therefore I think you got a situation where buyers will return into the market, probably just below. The ¥180 level is an area where I think you see a lot of interest yet again, as it has been very reliable in the past. Furthermore, we have the 50-Day EMA racing toward that area as well, and therefore I think you got a situation where you could see a significant bounce. The British pound of course has been one of the better performing currencies in the world, at least as far as larger currencies are concerned.

Keep in mind that the British pound is driving higher due to the fact that the Bank of England will have to fight significant inflation. At the same time, the Bank of Japan continues to do everything it can to keep interest rates down in that country, meaning that they are still involved in quantitative easing. If we were to break down below the 50-Day EMA, then the possibility is that the market goes down to the ¥175 level. The ¥175 level is where we had taken off from previously, so I think that’s also another support level.

If we were to turn around and take off to the upside, clearing the ¥183 level, then it opens up a move to the ¥184 level, perhaps even the ¥185 level, which I do believe is the intermediate target. Anything above there opens up the possibility of the market going much higher, perhaps eventually going to the ¥200 level, which is my longer-term target. I don’t necessarily think that is going to be easy to get to, but I think longer-term that is where we are heading. The Japanese have painted themselves into a corner over the last couple of decades through quantitative easing, so now they are paying the price and the Forex markets. I do believe this will continue over the longer-term, and therefore I am still very bearish on the Japanese yen longer-term.

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