GBP/JPY Forecast – British Pound Spikes Against the Japanese Yen

GBP/JPY Forecast Video for 20.04.23

British Pound vs Japanese Yen Technical Analysis

The British pound will continue to look strong against the Japanese yen, and the Wednesday session of course has been more of the same. The market spiked above the ¥168 level but did give back quite a bit of momentum, at least as far as holding on to gains is concerned. That being said, the market is obviously bullish so I think short-term pullback should continue to offer buying opportunities, and I do think that eventually we will try to find our way to the ¥170 level.

Keep in mind that the Bank of Japan continues to do yield curve control, and therefore you need to be cognizant of what’s going on in the bond markets. After all, the bond markets dictate what the Bank of Japan will have to do, as it continues to employ yield curve control. Yield curve control meaning that they will have to print more Japanese yen every time we get closer to that 50 basis point level in the 10 year yield, which is exactly what caused so many problems with the yen last year. If that ends up being the case again, that would obviously be very bearish for the yen, and we could see the British pound spike quite a bit higher against it, especially considering that the British pound has been one of the better performing currencies this year.

Underneath, I suspect that the ¥165 level should be an area of psychological support, and then after that you have the 50-Day EMA which of course is near the ¥163.50 level and rising and is also an indicator that a lot of people pay close attention to. The market breaking down below that level then opens up the possibility of a move down to the ¥160 level underneath, which is where we had recently seen quite a bit of support. Either way, I think this remains a “buy on the dip” type of situation, and that’s how you have to look at the markets in general. I don’t have any interest in buying the Japanese yen against the British pound at this point, and therefore I’m looking for upside opportunities.

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