GBP/JPY Price Forecast – The British Pound Bounces Hard

British Pound vs Japanese Yen Technical Analysis

The British pound bounced from the ¥160 level during the trading session on Tuesday to show signs of life again as the ¥160 level has been important multiple times. Furthermore, we also have the 200-Day EMA sitting just below there as well, so this adds even more credence to the idea of the area offering support.

If the market continues to respect this area, then we are probably just going to end up staying in this consolidation range. The top of the potential consolidation range is near the ¥165 level, and therefore it’s likely that we continue to see a lot of back and forth. As we are close to the middle of this range, we are essentially in “no man’s land”, so therefore it’s difficult to place any trade right now because quite frankly it’s going to be so noisy. We are getting close to the short-term “fair value” of this pair, so you need to keep that in your mind.

Once we break out of this 500-point range, it gives the market the ability to go much higher or lower. If we do break down, the market will more likely than not break down to the ¥157.50 level, and then perhaps down to the ¥155 level. If we do break to the upside, then breaking above the ¥165 level opens up the possibility of a retest of the highest, which is at roughly ¥168.

The biggest issue is that even though the Japanese yen is extraordinarily negative, the reality is that there are a lot of concerns in the United Kingdom as well. Look to the USD/JPY pair for a bit of a “heads up” as to whether or not the yen is strengthening or weakening.

GBP/JPY Price Forecast Video for 17.08.22

For a look at all of today’s economic events, check out our economic calendar.