GBP/JPY Forecast – British Pound Continues to Rally

British Pound vs Japanese Yen Technical Analysis

The British pound has shown itself to be rather resilient during the trading session, after initially dipping against the Japanese yen. By doing so, the market looks as if it is trying to figure out whether or not it can continue to go toward the ¥187 level. The ¥187 level had offered resistance previously, and it could be a nice target at the moment. Short-term pullbacks at this point in time continue to offer buying opportunities.

Underneath, the 50-Day EMA is hanging around the ¥183 level, which is also starting to turn higher so I think that technical support will continue to offer a bit of help as well. With this, I like the idea of buying dips in the spare, and I do believe that eventually the Japanese yen gets eviscerated by not only the British pound, but by almost everything else on the planet. This is because of the Bank of Japan interest rate issues, as they try to keep rates down, it makes the currency unattractive. With this, I like the idea of buying and then getting aggressively long of the market once we break out above the 187 level, as we go racing toward ¥190 area.

If we pull back, I look at that as a nice buying opportunity, and I believe that not only will the 50-Day EMA offer support, but we also have to pay close attention to the idea that the ¥180 level underneath there offers a bit of a “floor in the market” that traders will continue to pay close attention to because it not only has proven itself in the past, but it is also a large, round, psychologically significant number that a lot of people will have to pay close attention to. I don’t think we get there anytime soon, but it is your “worst-case scenario” for the market at the moment so pay close attention to it and recognize that people will be willing to jump into the market if we do drop down to that level, all things being equal.

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