Yahoo Finanza GBP/JPY Forecast – British Pound Bounces Into the Weekend Against the Yen
GBP/JPY Forecast Video for 15.05.23
British Pound vs Japanese Yen Technical Analysis
The British pound has rallied a bit during the trading session on Friday, using the ¥168 level as support, just as it did on Thursday. Now it looks like the market is ready to continue attempting to break to the upside, which features the ¥170 level on the way up to the ¥172 level. The ¥170 level will likely offer a little bit of psychological resistance, but as we have sliced through a couple of times already, I suspect it will be minor at best.
If the market were to take out the ¥172 level, then it’s very possible that this pair could go to the ¥175 level. Certainly, the interest rate differential alone will probably continue to add upward pressure to this market as the Bank of Japan continues to practice yield curve control by putting a cap on the rate of return of the 10-year JGB of 50 basis points. To do this, they need to print more Japanese yen and buy bonds, which has been damaging the yen’s value all along. As long as this is the game that the Bank of Japan is playing, the Japanese yen will continue to be soft in general.
So far, buying this pair on pullbacks has worked out quite well, and I don’t see how the changes anytime soon. The 50-Day EMA is down at the ¥166.50 region, but it is rising rather rapidly, offering potential technical support down the road. In fact, it’s not until we break down below the ¥165 level that I even begin to think about the possibility of shorting this market, and even then you would have to contend with the 200-Day EMA if the market were to break down that far.
With all of this in mind, I continue to buy dips and I do think that it is probably only a matter of time before we break above the ¥172 level, and go looking to reach the psychologically important ¥175 level, which is not only psychologically important, but has been historically important as well.
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This article was originally posted on FX Empire
