GBP/JPY Weekly Forecast – British Pound Gives Back Half of the Gains for the Week

GBP/JPY Forecast Video for 21.08.23

British Pound vs Japanese Yen Weekly Technical Analysis

The British pound has rallied significantly during the course of the week to break above the ¥185 level, but the Friday session has been very negative, and therefore we have seen a bit of a giveback, perhaps losing about 50% of the attitude. All things being equal, this is a market that you should be a buyer of dips on, and therefore it’s a situation where you are looking for signs of levitation, and then take advantage of it. If we can break above the top of the candlestick, then I think it opens up a move to the ¥190 level given enough time.

On the other hand, if we were to break down below the bottom of the candlestick, then it’s possible that the market could drop down to the ¥180 level, which of course is an area where we’ve seen quite a bit of support in the past. All things being equal, I think this is a situation where you are trying to pick up bits and pieces of a position in order to go along. All things being equal, this is a market that I think will find its way higher, just due to the interest rate differential if no other reason. I get paid to hold on to this, therefore I think it’s likely that we will see plenty of interest in this market.

In general, I think this is a market that continues to be noisy but is still very positive in general. Overall, I believe that you are looking for opportunities to take advantage of the interest rate differential and the swap differential, as you get paid to hang on to the market, and of course the Bank of Japan is doing nothing to change the situation.

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