GBP/JPY Weekly Forecast – British Pound Pulls Back Against the Japanese Yen

GBP/JPY Forecast Video for 15.05.23

British Pound vs Japanese Yen Weekly Technical Analysis

The British pound has pulled back a bit against the Japanese yen during the course of the week, as the ¥172 level has been an area of selling pressure. If we can break above there, obviously, it would be a very bullish sign, but right now it looks like we have some work to do. Ultimately, this is a market that I think you have a situation where it remains a “buy on the dips” type of scenario. Because of this, I don’t have any interest in shorting this market, at least not until we break down below the ¥165 level, something that I don’t see happening anytime soon.

Alternatively, if we can break above the ¥172.50 level, then I think the British pound could open up the market for a much bigger move, reaching the ¥175 level and beyond at that point. It makes a certain sense as the Bank of Japan continues to see yield curve control as a necessity, and therefore the Japanese yen will be soft in general. By contrast, the Bank of England continues to fight inflation, and the rate hike this week will only make the differential between the 2 currencies even stronger. That being said, the market did give back some of the gains after the interest rate hike announcement, but that’s not that uncommon as perhaps traders were willing to take a profit.

At this point, I don’t have any interest in shorting. Therefore, I remain very bullish on the spare, but I also recognize that there is a lot of volatility out there and there is a certain amount of risk appetite that goes along with this pair as well. In other words, be careful and don’t get oversized in your position at any one time.

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