GBP/JPY Forecast – British Pound Continues to Grind Higher Against the Japanese Yen

GBP/JPY Forecast Video for 15.06.23

British Pound vs Japanese Yen Technical Analysis

The British pound initially pulled back during the trading session on Wednesday, as we continue to see a lot of volatility involving the Japanese yen. That being said, we have turned around to show signs of life, and it certainly looks as if the British pound will continue to rally quite drastically against the yen as the interest rate differential between the 2 countries continues to be very wide. The Bank of Japan has meeting on Friday but has already front run the announcement by suggesting that monetary policy is nowhere near being changed.

The Bank of England has to deal with the headwinds of inflation, with the hourly wage numbers showing signs of more potential inflation. Because of this, the Bank of England will be much tighter than the Japanese central bank, and that is essentially what’s going on here. Underneath, the ¥175 level should be massive support, as it is a large, round, psychologically significant figure in an area that we have seen quite a bit of resistance at previously.

The massive candlestick from the previous session on Tuesday shows just how bullish this market is, and I really don’t see anything that can keep the British pound from trading at ¥180 before it’s all said and done. Because of this, I like the idea of buying dips, because quite frankly the trend is so strong and therefore it’s difficult to imagine that we will turn around anytime soon. Given enough time, I think we got a situation where the market will continue to see a lot of momentum, and with that being the case, it’s difficult to fight this type of trend.

Ultimately, the ¥180 level will probably offer a bit of psychological resistance, and when you look at longer-term charts you can even make an argument for ¥177.50 being slightly resistive. I don’t think that’s a big deal, but given enough time it’s likely that we will continue to see the market break above there quite handily. This pair has been a bit of a monster over the last several months, and it just does not look to be changing anytime soon.

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