Yahoo Finance GBP/JPY Forecast – British Pound Attempting to Break Out
GBP/JPY Forecast Video for 05.06.23
British Pound vs Japanese Yen Technical Analysis
The British pound has rallied rather significantly during the trading session against the Japanese yen on Friday, as it looks like interest rates continue to suggest that central banks will remain tight, and therefore works against the Japanese yen as the Bank of Japan continues its yield curve control policy. With this, it’s probably only a matter of time before the British pound breaks out to the upside and continues to drive toward the ¥175 level.
If we do turn around and show signs of weakness, I think it offers a nice buying opportunity based on value, and therefore I think the ¥171.50 level is now going to be the “moving floor” as we clearly are in a bullish run. Ultimately, I think we got a scenario where the market will continue to favor the upside as the Bank of England remains tight, and of course the Bank of Japan will remain very loose for the foreseeable future. In this type of environment, it’s almost a given that the market will have to move to the upside, as it makes no sense for the Japanese yen to suddenly take off to the upside and be a currency that people want to own.
With this, I do think that we not only get the ¥175 level, but we continue to go much higher. We are in a situation where it’s almost perfect for a directional plane to the upside, and if you keep your position size correct, you can ride the volatility. Do keep in mind that this pair ends up being very volatile most of the time, so therefore you need to be cautious, but at the end of the day it’s clear that bullish traders are almost certainly going to continue to run the game here. Because of this, I have no interest in shorting, and quite frankly would even consider it until we break down below the ¥170 level at the very least. We are a long way from there, so every time I see this market pullback I just assume that it will be yet another buying opportunity.
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This article was originally posted on FX Empire
