GBP/JPY Forecast – British Pound Continues to See Noisy Behavior

GBP/JPY Forecast Video for 03.11.23

British Pound vs Japanese Yen Technical Analysis

The British pound has gone back and forth during the trading session here on Thursday, as we continue to see a lot of volatility. If we break above the top of the highs from Tuesday, that could send this market to the ¥185 level next. On the other hand, if we turn around and break down below the 50-Day EMA, then it’s likely that the British pound drops down to the ¥181 level, where we had shot straight up in the air from a couple of days ago.

The ¥180 level underneath there is massive support as well, and I do think that it will more or less be a “floor in the market” going forward. Breaking through that opens up the possibility of a move down to the 200-Day EMA, which would be a significant turnaround. The Bank of Japan continues to have a very loose monetary policy, so I just don’t see why you would want to own the Japanese yen. Because of this, I think you get a situation where the market is one that you buy on dips, but you also have to be very cautious with your position sizing due to the fact that it is such a volatile pair under the best of circumstances.

At this point, I think the only thing you can count on is a lot of volatility but that’s nothing new in this market. All things being equal, this is a situation where the interest rate differential continues to favor the pound, while the Japanese yen is nothing short of toxic in general. With that, I’m just simply waiting for an opportunity to buy the bounce, and take advantage of what has been very resilient. I think that Friday could be very noisy as well, as we have a major jobs number announce the coming of the United States, that will have ripple effects through the entire marketplace. With that, I think you got to be cautious, but look for value. I have no interest in shorting this pair, and at this point in time, I would have to see a massive change in attitude coming out of Tokyo to even consider looking for a reason to do it.

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