GBP/JPY Forecast – British Pound Gaps Higher Against Yen to Kick Off the Week

GBP/JPY Forecast Video for 07.02.23

British Pound vs Japanese Yen Technical Analysis

The British pound has gapped higher to kick off the trading session on Monday, pulled back a bit to fill most of the gap, and then rallied again. Ultimately, this is a market that looks as if it is trying to get back to the overall top of the gap, and therefore makes a certain amount of sense that we will continue to see more back-and-forth behavior. After all, the interest rate situation in Japan is the key, because the Bank of Japan looking to keep the interest rates at 50 basis points or lower on the 10 year note means the Japanese yen will continue to be printed in order to buy those bonds.

On the other side of the equation, the Bank of England has suggested that perhaps the economy in the United Kingdom may be better than originally thought, so that may help as well. Either way, you can see that we have a very well defined range that we have been in, and therefore there’s no reason to doubt that it will end. If we were to break down below the ¥155 level, then we could drop rather hard, but I would not hold my breath for that to happen.

It seems like the buyers are very resilient in this market. That being said, you also need to pay close attention to risk appetite, because it does have a significant amount of influence on this pair at times as well. The volatility will continue, but I do think eventually we will have to make a bigger decision and pick a direction for a bigger move.

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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