GBP/JPY Weekly Forecast – British Pound Gives Up Early Gains for the Week

GBP/JPY Forecast Video for 24.04.23

British Pound vs Japanese Yen Weekly Technical Analysis

The British pound has rallied rather significantly during the trading week but found a lot of resistance in the ¥168 level and turned right back around the show hesitation. That does make a certain amount of sense, due to the fact that we have seen so much upward momentum that one would have to think that we are a little overextended. That being said, I still think the market is probably going to be one that is essentially a “buy on the dip scenario”, as the Bank of Japan continues to keep yield curve control at the forefront of attention, as they are only allowing 50 basis points against the JGB.

Keep in mind that this pair is highly sensitive to risk appetite, and therefore you need to pay close attention to what other markets are doing. After all, the Japanese yen is considered to be a safety currency, and of course the British pound has been one of the better performers. That being said, looking at the interest rate differential you have to also keep in mind the fact that the British pound has been one of the better performing currencies around the world as the Bank of England continues to fight inflation. With that being the case, it does make sense that we continue to find plenty of buyers for the British pound against the Japanese yen, if for no other reason than the carry trade that it offers.

On dips, I think that there will be plenty of buyers, with an eye on the ¥165 level, followed by the ¥163 level. Either way, I don’t have any interest in trying to short this market anytime soon.

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