GBP/JPY Forecast Video for 13.02.23

British Pound vs Japanese Yen Technical Analysis

The British pound has initially fallen rather hard during the trading session on Friday, but then turned around to show signs of life again. By doing so, it looks like we are going to continue with the overall consolidation area that we have been in, and therefore I think it’s just more of the same action that we have seen since November of last year. I think given enough time, we will have to break out of this area, but it currently looks as if the ¥156.50 level is support, just as the ¥161.50 level above is significant resistance.

The 50-Day EMA is currently near the ¥161 level and seems to be dropping from here. If we can continue to see this market support the area underneath, then I think it is a potential turnaround, but we need to see what’s going to happen with the Bank of Japan and its fight to keep the 10 year yield at 50 basis points or below.

As we continue to see a lot of volatility, I think it probably favors being more of a short-term trader at this point, but keep in mind that if yields around the world spike, that is bad for the Japanese yen as the Japanese will have to do everything it can to keep that yield down, meaning that they will be printing more yen and therefore driving down the value of the currency. However, if yields were to drop around the world, that provides a lot of relief for the Japanese yen, and could be a catalyst for this pair to fall, right along with other yen-quoted pairs.

For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire

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