GBP/JPY Weekly Forecast – British Pound Finally Prints a Negative Candle

GBP/JPY Forecast Video for 10.07.23

British Pound vs Japanese Yen Weekly Technical Analysis

The British pound had initially tried to rally during the course of the week but gave back gains to show signs of hesitation. That being said, the market is still very bullish, so I think we may get a little bit of value hunting if we do pull back. Pulling back, it could just be a bit of profit-taking, because when you look at the chart, just 3 months ago we were almost 20 handles below where we are now.

The ¥185 level above continues to be a large, round, psychologically significant figure that will offer a certain amount of resistance. Ultimately, I do think that a pull back to the ¥180 level will attract a lot of value hunters, and it’s also worth noting that the market could either pull back to that area, or just simply go sideways. When we get big impulsive moves like we have had over the last several months, the next move is normally either a pullback, or some type of sideways action in order to work off some of the excess broth.

Ultimately, the interest rate differential between the Bank of Japan and the Bank of England continues to favor the upside, and I just don’t have a situation where I’m willing to start selling this pair. That being said, I would prefer to see some type of significant pullback that I could take advantage of, looking for value in the British pound. The Japanese yen continues to get beaten up around the Forex world, and I don’t think this pair will be any different, especially considering how much inflation the UK is currently facing.

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