GBP/JPY Weekly Forecast – British Pound Bounces From Support
GBP/JPY Forecast Video for 12.12.22
British Pound vs Japanese Yen Weekly Technical Analysis
The British pound has rallied a bit during the trading week, as the ¥165 level has offered significant support. This is an area that’s been important a couple of times, so should not be a huge surprise in general. All things being equal, this is a situation where we should continue to see a lot of volatility, but I think we continue to see a lot of upward pressure due to the Bank of Japan and its desire to fight rising interest rates. Remember, the interest rate differential between the 2 economies continue to diverge, although it must be stated that all eyes are on central bank actions and the bond markets.
Looking at this chart, I think if we were to break down below the ¥164 level, we could drop to the 162.50 level, where the 50-Week EMA is. Alternatively, if we can finally get above the ¥167.50 level, an area that’s been very difficult to break above, then we could open up the door to the ¥170 level. We are in an uptrend, but this is an argument between 2 economies that have a whole litany of issues, so I think it continues to see a lot of back and forth and choppy behavior, but with the caveat that the market seems to want to go higher.
Ultimately, there should be buyers on every dip, so therefore I favor the upside, but I also recognize that the British pound may underperform other yen related currency pairs. Ultimately, I do think that we reach the highs, but it’s going to perhaps take some type of fundamental catalyst to get everything going, more likely than not interest rates rising again.
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