GBP/JPY Weekly Forecast – British Pound Continues to Consolidate

GBP/JPY Forecast Video for 07.08.23

British Pound vs Japanese Yen Weekly Technical Analysis

The British pound has rallied a bit during the course of the week, but gave back the gains. That being said, the ¥180 level offers quite a bit of support, as it is a large, round, psychologically significant figure, and an area where we have seen a lot of support previously. If we do bounce from here, and I think it’s probably only a matter of time, then we will probably test the ¥184 level given enough time, and then possibly even the ¥185 level.

The previous week had a massive hammer, and it is not until we break down below there that I’d be concerned about the overall uptrend. Remember, we shot straight up in the air, so it’s not a huge surprise to see that we have had to go sideways for several weeks, and therefore it’s likely that we can continue to see a little bit of churning. If we can break above the ¥185 level, then it’s likely that we could go looking to the ¥200 level, which is a long-term target of mine.

Keep in mind that the interest rate differential continues to favor the upside, and therefore you get paid to hold onto this trade. I think it’s probably only a matter of time before we see buyers jumping in to ride this potential bullish flag. If we were to break down below the ¥175 level, that could change some things, but right now I just don’t see how that happens, and therefore I think it is likely that we see more of a “buy on the dips” scenario. Ultimately, this is a market that is behaving just how you make it would, as the Bank of Japan has done everything it can to work against the value of its own currency.

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