GBP/JPY Weekly Forecast – British Pound Recovers to Reach Fresh, New Highs

GBP/JPY Forecast Video for 26.06.23

British Pound vs Japanese Yen Weekly Technical Analysis

The British pound fell initially against the Japanese yen during the week, to test the ¥180 level. At this point, the market then turned around to show signs of strength again, as the Bank of Japan continues its very loose monetary policy. Furthermore, we have the Bank of England surprising the market with a 50 basis point rate hike during the week, and therefore it makes quite a bit of sense that we would see more upward pressure. Quite frankly, we are reaching an overbought condition, but at this point it looks like as long as the Bank of Japan continues to see reasons to keep monetary policy loose, things are going to continue to be in a one direction type of situation.

If we turned around and break down below the ¥180 level, then we could get a deeper correction, but right now there seems to be a lot of momentum in this market, and therefore it’s going to be very difficult to imagine that happening in the short term. Quite frankly, you should be looking at pullbacks as an opportunity to take advantage of value, as interest-rate differential will continue to get you paid at the end of every session. I have no scenario in which I’m willing to sell this market, because quite frankly it just continues to get more fundamental reasons to continue going higher. Ultimately, this is a situation where you need to be cautious, but you should also pay close attention to the idea of looking at any pullback as an opportunity to “buying cheap British pounds and get paid.”

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