GBP/JPY Forecast – British Pound Pulled Back Against the Yen

GBP/JPY Forecast Video for 17.11.23

British Pound vs Japanese Yen Technical Analysis

The British pound has pulled back just a bit during the trading session on Thursday as we have tested the ¥187.25 level, an area that previously has been supported, so it will be interesting to see if we can hold it here. If we aren’t able to do so, the next support level that I have is at the ¥186.65 level. Either way, we are in an uptrend and that is one of the most important things to pay attention to.

On a break above the hammer shaped candlestick from the Wednesday session, that would be a sign of continuation, opening up the possibility of a move to the ¥190 level. I do believe that eventually this pair goes much higher, perhaps reaching to the 200-Day EMA after that. We have been impulsive to the upside, so it does make a certain amount of sense that we either go sideways or pull back a bit in order to find a bit of value.

Keep in mind that the interest rate differential between the 2 currencies continues to favor the British pound, and you get paid to hold on to this pair. With that in mind, I do think that we will continue to see a lot of upward pressure, and I think it’s probably only a matter of time before the buyers come in and pick up value, as they get a positive swap, something that longer-term investors like. At this point in time, I have no interest in shorting this market regardless, and therefore I think it’s a situation where you cannot sell this pair, as the Japanese yen is going to continue to be a toxic currency.

All things being equal, the market should continue to run higher, therefore you need to look at it through that prism. I have no interest in trying to fight this trend, and I think it would be a great way to lose money. It’s not until the Bank of England changes its monetary policy that this pair will change trends, because quite frankly the Bank of Japan has already shown that it’s not going to.

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