Yahoo Finance GBP/JPY Forecast – British Pound Continues to Stretch Against the Japanese Yen
GBP/JPY Forecast Video for 29.05.23
British Pound vs Japanese Yen Technical Analysis
The British pound cleared the ¥173 level during early trading on Friday as we initially pulled back, only to see buyers come back in and pick this market up. We are a bit stretched, but as long as there is a major interest rate differential between the 2 currencies, it makes sense that the British pound will be a winner. The ¥173 level being broken suggests that we will probably eventually reach the ¥135 level, which is the next large, round, psychologically significant figure.
Underneath is a massive amount of support near the ¥171.50 level, as we have seen it act like a floor over the last week or so. With the fundamental situation being the way it is with the Bank of Japan, it’s difficult to imagine a scenario where the Japanese yen picks up strength anytime soon, and therefore I think you’ve got to look at this through a “buy on the dips” type of attitude, with perhaps the ¥170 level being the hard floor in the market. The 50-day EMA is sitting down at the ¥160.50 level and is rising. This market continues to see a lot noisy behavior, but this is a situation where you only have one direction that you should be looking at. Quite frankly, it’s difficult to see where this market is a short anytime soon.
Money management will be crucial going forward, as the volatility of “The Dragon” is often a major source of turmoil in people’s accounts. The overall attitude of this market is obvious, and there is no fundamental reason whatsoever for the market to turn around anytime soon, so I think we will continue to buy all dips, and recognize that as long as the Bank of Japan continues its yield curve control policy, there’s just no reason for this market to fall for a significant move. Keep your position size reasonable, but I plan on building as we continue the next leg higher in what has been a very steady and reliable uptrend over the last several months.
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This article was originally posted on FX Empire
