GBP/JPY Weekly Forecast – British Pounds Shows Hesitation

GBP/JPY Forecast Video for 28.08.23

British Pound vs Japanese Yen Weekly Technical Analysis

The British pound has initially tried to rally during the course of the week we gave back gains to show a little bit of hesitation against the Japanese yen. That being said, this is a market that is still very well supported by interest rate differentials, and I look at this through the prism of buying on the dip. Yes, I can see that we may be forming a tweezer top, but at the end of the day, the fundamentals will win over a couple of candlesticks. That being said, if we do see some type of turnaround, it’s not until we break down below the ¥180 level that you can take a sell off serious at all. Even then, you probably have supported just above the ¥175 level.

The interest rate differential is still huge, and therefore traders are getting paid to hang on to this currency position going forward. If we can break above the top of the potential tweezer top, then the market has the ability to run toward the ¥187.50 level, possibly even the ¥190 level. Longer-term, I would not be surprised at all see this pair reached the ¥200 level, it’s obvious that we got a little ahead of ourselves a while ago, and what we are seeing now is essentially the market trying to work off some of that excess profit.

Another thing that you need to pay attention to is the fact that liquidity will increase here rather soon, and that could see the market reacting as to how the larger players get involved after their holiday season.

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