GBP/JPY Forecast Video for 01.06.23
British Pound vs Japanese Yen Technical Analysis
The British pound has fallen rather hard against the Japanese yen during the trading session on Wednesday, as we continue to see a lot of questions about the Bank of Japan and its monetary policy. It’s probably worth noting that the Bank of Japan decided to call an emergency meeting, and also had its head, Kuroda, say that the “era of low interest rates may be over.” However, whether or not they actually do anything about it will remain to be seen.
It’s worth noting that the market has gotten a little overextended, therefore I think it’s possible that we could see a bit of a pullback, perhaps even as deep as ¥170. That being said, the ¥171.50 level has been supported recently, and therefore it’s likely that we could continue to see that as an area of interest. If we were to break down below the 50-Day EMA, that is possible that we could go down to the ¥168 level. That being said, I think it’s probably going to take quite a bit to make that happen, but it is something worth noting.
The ¥175 level above seems to be a significant barrier, but I do think we get back to that region given enough time. However, the market has been very impulsive over the last couple of months, so a short term correction makes quite a bit of sense. Nonetheless, that short-term correction could be a nice buying opportunity and as things stand right now, I think the likelihood of that happening is very significant. However, if we turn around and take out the top of the shooting star from the Tuesday session, then I think eventually we go looking to the ¥175 level. Anything above there just brings in more buyers as it substantiates the longer term uptrend. At this rate, it would not surprise me at all to see the British pound trading at ¥200 sometime later this year, perhaps early next year.
At this point, I’m looking for some type of value based on a pullback. The candlestick for the Wednesday session was a good start, but we may have a little further to go before I actually pull the trigger on this pair, but I certainly will not be selling at any time soon.
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This article was originally posted on FX Empire