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GBP/JPY Forecast – British Pound Continues to Build Pressure

GBP/JPY Forecast Video for 09.06.23

British Pound vs Japanese Yen Technical Analysis

The British pound has gone back and forth during the course of the trading session on Thursday, as we continue to build up pressure underneath the ¥175 level in an attempt to break above there. If we do break above the ¥175 level, then the market is likely to go much further to the upside. At that point, I would anticipate it will be more of a “buy-and-hold” type of scenario, something that I think it makes quite a bit of sense over the longer term. When you look at the chart, you can see that the Thursday candlestick was very bullish, so I do think that there are buyers underneath willing to jump into this market if we do offer a bit of value.

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The 50-Day EMA sits right around the ¥170 level, which was previously important, and of course is a large, round, psychologically significant figure. With that being the case, it’s very likely that it has become the “floor in the market”, assuming that we can even get down to that area.

All things being equal, I think we continue to see a lot of noisy behavior but I think given enough time we probably continue to break out to the upside as the interest rate differential between the British and the Japanese are wide enough to drive a truck through. Interest rate differential continues to be a major driver of the currency markets right now, and I think that will most certainly be the case in this market.

Another thing to keep in the back of your mind is that sometimes risk appetite has a major influence on what we do in this pair as well, so remember that the Japanese yen can be considered a safety currency at times, and therefore it’s likely that we will see a lot of interest paid to what’s going on with the overall risk appetite of the world. At this point, I have no interest in shorting this market anytime soon, at least not until we break down below the ¥170 level at the very minimum.

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

This article was originally posted on FX Empire

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