GBP/JPY Forecast – British Pound Pulled Back Against the Japanese Currency

GBP/JPY Forecast Video for 20.11.23

British Pound vs Japanese Yen Technical Analysis

The British pound has fallen against the Japanese yen as the markets continue to experience a lot of volatility. The ¥185 level underneath will continue to be a major support level, and I think it is probably only a matter of time before buyers jump in and take advantage of “cheap British pounds.”

Overnight, the Bank of Japan Gov. Ueda suggested that the Japanese would start considering getting rid of yield curve control but quite frankly that seems to be very unlikely. He continues to try to jawbone the markets occasionally, but at the end of the day is very difficult to think that the Japanese can handle the debt load that would come with higher interest rates. Because of this, it’s probably only a matter time before the market turns around and rallies.

Furthermore, you need to keep in mind that the British pound has a higher interest rate attached to it, so therefore the interest rate differential continues to favor holding this pair, and this pullback should end up being a nice buying opportunity given enough time. The market not only offers more of a “buy on the dip” situation, there are some areas above that could offer a bit of resistance. The first one of course is the ¥186.65 level, and then the ¥188 level which recently has caused a bit of a headache for buyers.

The market continues to see a lot of noisy behavior, I think the market is going to continue to see a lot of erratic behavior and therefore you need to be very cautious with your position sizing as volatility can cause you a lot of losses very quickly. All things being equal, the market breaking down below the ¥184 level could change some things, but I just don’t see it happening any time soon. If we were to break down below there, then the ¥182 level is a major support level. Anything below there could open up a massive amount of selling but seems to be very unlikely to happen anytime soon. While the candlestick on Friday was rather negative, we are already starting to see a little bit of a turnaround.

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