GBP/JPY Weekly Price Forecast – British Pound Falls Hard Against Japanese Yen

British Pound vs Japanese Yen Weekly Technical Analysis

The British pound has fallen hard against the Japanese yen during the trading week, slamming into the crucial ¥165 level. By doing so, it shows just how precarious the situation is in the United Kingdom, and with the Bank of England suggesting that the UK was about to go through 2 year recession, nothing good is coming out of the UK at the moment. However, the Bank of Japan continues to present the FX world with an easy trade, by purchasing unlimited bonds. In other words, they are printing unlimited Japanese Yen.

It’s simple supply and demand, if you continue to see an unlimited amount of Japanese yen flood into the market, then it’s difficult to imagine that there’s going to be a huge demand for them over the longer term. That being said, this is a pair that will probably underperform a lot of the yen related pairs, because quite frankly most central banks around the world are a little bit better off than the Japanese are, as they are fighting a situation that is like being stuck between a rock and a hard place.

The size of the candlestick is quite concerning, but it’s also worth noting that the ¥165 level has been fiercely fought over previously, so one would have to assume maybe we are trying to form a consolidation area of roughly 500 pips. However, we do break down below the ¥165 level, then the next potential support level is closer to the ¥162.50 level, and then again at the ¥160 level where the 50-Week EMA currently resides. While it still has a little bit more of a bullish tone to it, this past week has certainly asked a lot of questions of the pound.

GBP/JPY Price Forecast Video for 07.11.22

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