GBP/JPY Forecast Video for 24.08.23

British Pound vs Japanese Yen Technical Analysis

The British pound has fallen rather hard against the Japanese yen during trading on Wednesday, as we continue to see a lot of volatility in the Forex markets. PMI numbers in the United Kingdom came out weaker than anticipated, therefore we have seen the British pound itself get hammered. People were speculating that perhaps the Bank of England will have to cut rates, but when you look at the longer-term charts, you can see that this is more likely than not going to end up being a buying opportunity. After all, the Bank of Japan is nowhere near tightening its monetary policy, and even if the British did decide to do a quarter-point cut suddenly, it would still leave a spread between interest rates that you could drive a truck through.

At this point, I will be looking for signs of a bounce that I can take advantage of, and therefore a short-term hammer or some other type of candlestick to at least give me a benchmark to go into the market. The 50-Day EMA currently sits right around the ¥181.50 level and is rising. I think that is a soft “floor of the market”, with the real “floor” being closer to the ¥180 level.

The candlestick that we have made during the trading session on Friday, is of course a very ugly candlestick to say the least. In other words, we may have a little bit of follow-through, but the lower we go, the more interested I am in picking up value. After all, the Japanese yen continues to get hammered against most things, and the British pound will remain in that given enough time. If we can recapture the ¥185 level, this is a market that I think could go much higher, perhaps trying to break above the recent highs and look into the ¥190 level. All things being equal, I still think that we could go all the way to the ¥200 level, but that doesn’t necessarily mean that we are going to see it sometime in the next few days, so make sure that you are somewhat measured in your approach.

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This article was originally posted on FX Empire

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