GBP/JPY Price Forecast – British Pound Pulling Back Toward Support

The British pound has pulled back a bit against the Japanese yen during the trading session on Tuesday to test the ¥155 level. This is an area that has been important more than once, and more than likely will attract a certain amount of attention. Because of this, I suspect that there are buyers waiting to get involved, but we need more of a “risk on” type of environment to make that happen. After all, the Japanese yen is considered to be the ultimate “safety currency”, and therefore it attracts a certain amount of attention in times of concern.

GBP/JPY Video 03.11.21

That being said, we had recently shot straight up in the air and therefore a little bit of digestion and value searching makes quite a bit of sense. The market will more than likely find buyers relatively soon, because even if we were to break down below the ¥155 level, there is the 50 day EMA and the ¥152.50 level underneath that both could offer potential buying opportunities.

Because of this, I think it is simply a matter of waiting for the bounce to get involved in what looks to be a very strong uptrend. After all, the Japanese yen has been hammered by multiple currencies, so one would think there would be a bit of a “knock on effect” over in this pair. Furthermore, the Bank of England is likely to raise interest rates between now and the end of the year, while the bank of Japan continues to keep its ultra-easy policy in place. Longer-term, this pair could reach towards the ¥160 level, but it is going to take some time to get there to say the least.

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