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GBP/JPY Price Forecast – The British Pound Runs Into a Brick Wall

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·2-min read
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British Pound vs Japanese Yen Technical Analysis

The British pound has rallied a bit during the trading session on Friday to reach the ¥160 level, an area that has been important more than once. By doing so, we also tested the 50 Day EMA, so that is worth keeping in the back of your mind as well. You should also be aware of the fact that this pair is highly sensitive to risk appetite, and therefore you need to pay attention to multiple markets, not just this particular one.

Looking at this chart, if we break down below the lows of the Friday session it is likely that we will retest the ¥157.50 level, where we had bounced from previously. If we were to break down below there, then it is likely that we will challenge the 200 Day EMA. The 200 Day EMA is an indicator that a lot of people pay close attention to, and of course, was where we bounced from previously. If we were to give that up, then this market could drop rather significantly.

The Bank of England is worried about recession while the Bank of Japan is doing everything it can to fight higher interest rates. These are both fairly weak currencies, but it is worth noting that the British pound has been particularly miserable. Because of this, I still like the idea of fading rallies, but if we broke above the ¥162.50 level, then I would have to rethink the entire situation. It is also worth noting that a “head and shoulders pattern” formed previously, so that is generally a sign that we are going to have plenty of selling pressure on rallies.

GBP/JPY Price Forecast Video 23.05.22

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This article was originally posted on FX Empire

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