GBP/JPY Price Forecast – British Pound Pulls Back After BOE Comments

The British pound has pulled back a bit against the Japanese yen during the trading session on Tuesday as Gov. Bailey suggested that the Bank of England was going to continue to purchase bonds to keep yields low. Having said that, there is still a massive differential between the United Kingdom and Japan when it comes to bond yields, so that favors this pair going higher over the longer term. Underneath, the ¥150 level is a large, round, psychologically significant figure that traders will be paying attention to, and therefore I would be very interested in buying this pair if we get down towards that area, but right now I do not know that we get there.

GBP/JPY Video 17.03.21

To the upside, I believe that the ¥152.50 level would be an area of resistance, but now that we are well above the ¥150 level, the longer-term target is the ¥155 level. While we have seen a significant reaction to the comments coming out of Gov. Bailey, the reality is that we were bullish long before then and even if we did get a significant pullback, it will only be looked at as a buying opportunity over the longer term. This is especially true when you take a look at the Japanese yen against almost everything right now, as it is being dumped against most global currencies. The British pound of course is an area where people have been jumping into, due to the fact that the UK economy is opening up quicker than many others, and of course vaccination numbers have been stronger in the UK than most other places.

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