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GBP/JPY Forecast – British Pound Continues to Go Back and Forth Against Yen

GBP/JPY Forecast Video for 11.05.23

British Pound vs Japanese Yen Technical Analysis

The British pound has initially tried to rally during the trading session on Wednesday but gave back some of the gains as we continue to see a lot of choppy consolidation. The ¥170 level is a large, round, psychologically significant figure, and therefore attracts a lot of attention, and it is offering short-term support underneath. At this point, I think it’s probably only a matter of time before the market continues to figure out what it wants to do, and in the meantime, it will be very noisy. Ultimately, this is a market that has seen a lot of momentum thrown into it, and that does make a certain amount of sense considering that the Bank of Japan has done everything it can to keep interest rates down, meaning that they are printing yen. By contrast, the Bank of England is very tight with its monetary policy, so it does make a certain amount of sense at this market has continued to see buyers.

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Short-term pullbacks continue to be buying opportunities from what I can see, with the ¥168 level underneath being a major support level. The 50-Day EMA sits right around the ¥166 level and is rising. All things being equal, this is a market that I think is very noisy, but still favors the upside overall. I don’t have any interest in shorting this market, as it has been so bullish for so long. All things being equal, this is a market that I think continues to see a lot of volatility, but that’s nothing new for this pair.

Make sure that you keep your position size reasonable, with the reality being that this is an extraordinarily volatile pair under the best of circumstances, and at this juncture it’s likely that we will continue to see a lot of questions asked of risk appetite. Because of this, you need to be cautious, but it’s clearly a market that still has more upward pressure than down, so that’s the way you need to approach it. If we can break above the ¥172.50 level, this pair could take off to reach the ¥175 level.

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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