GBP/JPY Weekly Forecast – British Pound Plunges Against the Yen for the Week

GBP/JPY Forecast Video for 27.03.23

British Pound vs Japanese Yen Weekly Technical Analysis

The British pound has initially tried to rally against the Japanese yen during the week but found quite a bit of resistance near the ¥162.50 level. That’s an area that previously has been resistance, so it does make a certain amount of sense that we would see sellers there again. The market has broken down below the ¥160 level, multiple times during the week. That being said, there also has been plenty of upward pressure underneath there, so at this point I suspect that the market is still trying to find its footing as to which direction it wants to go.

At this point, the ¥157.50 level should offer a certain amount of support based upon previous action, and then after that the ¥155 level would also offer a significant amount of support. Ultimately, this is a situation that has been very noisy as of late, and I think longer term traders are going to continue to have a hard time trading this market. You can also squint and make a bit of an uptrend line underneath, and therefore it’s likely that we will find buyers based on that as well.

Keep in mind that the Bank of Japan continues its yield curve control situation, meaning that they will continue to have to print Japanese yen every time the yield start to rise against the 10 year JGB. There is a current limit of 50 basis points, and therefore they will have to print those to buy unlimited bonds if the market moves in that direction. However, the market were to see yields drop, as we have multiple times recently, that helps the Japanese yen.

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