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GBP/JPY Price Forecast – British Pound Continues to Grind Away at the Japanese Yen

By:
Christopher Lewis
Published: Oct 3, 2022, 13:29 UTC

The British pound has rallied rather significantly during the trading session on Monday, as we continue to see a lot of noisy behavior in general.

British Pound FX Empire

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British Pound vs Japanese Yen Technical Analysis

The British pound has rallied again during the Monday session against the Japanese yen, but at this point in time looks to be very overextended. That being said, I suppose anything is possible in this type of environment but at this juncture it certainly looks as if the market is going to struggle to continue going higher, at least at this pace. Being overextended is a reaction to the oversold condition previously, but to think that the British pound is suddenly going to be the place to be in the Forex world is a real stretch.

The only thing that’s keeping this market going higher is the fact that the Japanese yen is that soft. You’d be better off more likely than not to find a strong currency against the yen, and the British pound just is not that currency. This was a recovery from an oversold condition, or something similar to a “bear market rally” if you will. We are not technically in a bear market, but it certainly has behaved like that.

The ¥160 level is an area that I will be paying close attention to, mainly due to the fact that it’s a large, round, psychologically significant figure that has shown a proclivity to offer support in the past. If we were to break down below there, then I think we could see another flush lower. In the meantime, I think this is going to be a market that’s going to be very noisy, which is nothing new for this pair but at the same time you should also recognize that these types of moves are not normal and need to be corrected.

GBP/JPY Price Forecast Video for 04.10.22

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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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