GBP/JPY Weekly Forecast – British Pound Bounces From Crucial ¥180 Level

GBP/JPY Forecast Video for 17.07.23

British Pound vs Japanese Yen Weekly Technical Analysis

The British pound has fallen pretty significantly during the course of the trading week to reach the ¥180 level, which of course is a large, round, psychologically significant figure. By bouncing the way we have, it suggests that the market is probably going to go back and forth, trying to work off some of the excess froth that we have seen. After all, the market has been straight up in the air for a while, and therefore I believe that the market will continue to see a lot of hesitation, but the ¥184 level above is the beginning of a major barrier. I don’t think that we can just slice through there, but it is something that you need to keep in the back of your mind. All things being equal, I think this is a market that is chasing interest rate differentials, as the Bank of England continues to be much tighter with its monetary policy than the Bank of Japan.

If we were to break down below the bottom of the candlestick for the trading week, then it opens up a correction down to the ¥177.50 level, and then eventually the ¥175 level after that. I do believe that there will be buyers on some type of dip, because we have seen so much in the way of upward momentum, and typically these types of moves offer a sign of strength that will continue. Furthermore, even though the Bank of Japan has suggested that they may “tweak” yield curve control, they are nowhere near getting as tight as the British, and therefore the interest-rate differential will continue to offer a positive swap. I am a buyer.

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