GBP/JPY Price Forecast – British Pound Heading Toward Support

The British pound has fallen again after initially trying to recover on Friday as the market is trying to price in the idea of the Bank of England not raising rates. The British pound has gotten beaten down against most currencies as a result, but we are starting to get to the point where support comes into the picture against the Japanese yen. I believe the ¥152.50 level will be an area of interest, and therefore I think a bounce from here is very possible. The Friday candlestick close will course be important, and therefore I will be paying close attention to it.

GBP/JPY Video 08.11.21

Looking at the chart, if we do bounce from here, we could end up at the ¥155 level, especially if there is anything remotely suggesting that the Bank of England will have to tighten rather soon, and I think at this point in time it still very possible they do early next year. It was a bit of a surprise that they chose not to do so, but eventually they will be forced to do so. Inflation in Great Britain has been raging, and it is only a matter of time before we would see the tightening be necessary.

While the Bank of England is remaining very cautious, the reality is that eventually their hand will be forced. I think given enough time, we will almost certainly see that come into the picture, and therefore push things back to the upside. If we break down below the ¥152 level though, that could open up a move back down to the ¥150 level. Anything below there would change the overall trend.

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