GBP/JPY Forecast – British Pound Struggles at Highest

GBP/JPY Forecast Video for 13.04.23

British Pound vs Japanese Yen Technical Analysis

The British pound initially tried to rally during the trading session on Wednesday, as we continue to see a lot of noisy behavior against the Japanese yen. Ultimately, we are threatening an area where we had a massive “wipeout candle” from previous trading that could come into the spotlight. The ¥166 level is essentially where we are at, and therefore we need to pay close attention to what’s going on.

This is a pair that is highly sensitive to risk appetite, so therefore you need to be cautious with your position size and recognize that the market could be very noisy to say the least, and therefore you have to look at the longer-term charts. We have gone higher recently, and now it looks like we will probably see quite a bit of upward pressure on dips. I think looking for value on a pullback is probably going to be the best way going forward, so therefore you need to be looking for “cheap British pounds” in order to take advantage of.

If we do break down from here, the ¥163 level should be support, especially as the 50-Day EMA is racing toward it. That should be an area that a lot of value hunting will occur, and I do think that it would probably be only a matter of time before we got a supportive candlestick that told us it was time to get long again. That being said, if we break down below those moving averages, being the 50-Day EMA and the 200-Day EMA just below it, then it could open up a bigger move down to the ¥160 level, which is the bottom of the overall range.

Keep in mind that the Bank of Japan continues to do its yield curve control policy, meaning that it is going to continue to print yen every time interest rates rise, at least toward the 50 basis point level. Because of this, the Japanese yen will continue to be somewhat soft in general, and it is probably worth noting that the British pound has been one of the better performing currencies of the year. With that in mind, this still looks like a market that the buyers have control of.

For a look at all of today’s economic events, check out our economic calendar.