GBP/JPY Forecast Video for 08.08.23

British Pound vs Japanese Yen Technical Analysis

The British pound has rallied a bit against the Japanese yen during the trading session on Monday, as we continue to see the ¥180 level underneath offer support. Furthermore, we have the 50-Day EMA underneath rising to show signs of support near that area as well. As long as the market continues to see major interest rate differential between the two currencies, the reality is that you get paid to hold onto this pair. The ¥180 level is a large, round, psychologically significant figure that people will be paying close attention to. Even if we break down below this level, then it’s likely that we could see plenty of support not only at the 50-Day EMA, but also near the ¥177.50 level where we had bounced from previously.

To the upside, the market is likely to continue to go looking to the ¥184 level, and then possibly the ¥185 level. The ¥185 level is an area that a lot of people will pay close attention to, but if we were to break above there, then the market is likely to continue its next leg higher, and it could really start to become more or less a “buy-and-hold” type of situation as we try to work our way toward the ¥200 level.

Regardless, this is a market that I think continues to see a lot of noisy behavior, but this is the scenario where we continue to see more or less a “buy on the dip” type of scenario as well. Ultimately, I just don’t have a situation where I’m willing to short this market anytime soon, because quite frankly the Bank of Japan continues to do everything it can to keep interest rates lower, and therefore it makes the currency a lot less attractive. The overall situation remains very choppy, but I still believe that this is a market that continues to go higher over the longer term and therefore I’m looking for short-term dips as an opportunity to pick up value in a market that I do think has much further to run to the upside.

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This article was originally posted on FX Empire

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