GBP/JPY Forecast – The British Pound Bounces Hard From Initial Selloff

GBP/JPY Forecast Video for 20.01.23

British Pound vs Japanese Yen Technical Analysis

The British pound has bounced rather hard after initially falling hard down to the ¥157.50 level. At this point, the market looks as if it is going to continue to be very noisy, and therefore you need to keep an eye on your position size, as the volatility is probably going to continue to see plenty of choppiness, and therefore you need to keep your exposure somewhat minor.

The ¥160 level above is a major barrier, so if we can get back above there it would be a strong sign of recovery. On the other hand, if we break down below the ¥157.50 level, then it’s possible that the market could go back down toward the ¥155 region. Either way, this is a market that is going to be prone to shocks, because there are a lot of different things going on at the same time. For example, you have the Bank of Japan doing everything he can to keep interest rates low, which means that they are printing currency, but at the same time you also have the risk appetite correlation of this pair.

The market does tend to be sensitive to what the world feels like at the moment, so watch other markets such as stock markets to see whether or not it is “risk on”, or “risk off.” While the correlation is not as strong as it had been, the reality is that it’s the longer-term correlation that people associate with this pair, so you could certainly have a little bit of that going on. Ultimately, I think it’s probably only a matter of time before we have to break out of this consolidation.

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