British Pound vs Japanese Yen Technical Analysis
The British pound initially tried to rally during the trading session on Monday but has given back quite a bit of the gain to show signs of hesitation yet again. The last three days have seen the ¥163.50 level offer a bit of selling pressure in hesitation, and it is also worth noting that we have recently had three massive negative candlesticks, which typically will bring in more selling pressure. After all, you do not fall the way we have without some type of follow-through given enough time.
The 50 Day EMA underneath sits at roughly ¥160.50 level and is rising at this point. That could cause a little bit of dynamic support, and I certainly would not be surprised at all to see this market reach down to that area. In fact, if we break down below the Friday lows, it might be worth a short-term trade. Longer-term, we still have plenty of support at the ¥160 level, which extends down to the ¥159 level. If we were to break down through there, then we could get a pretty negative move and perhaps even change the overall trend.
Keep in mind that the Bank of Japan continues to fight rising interest rates via buying JGB bonds. Because of this, they are essentially “printing yen”, which is going to continue to drive the value of the currency lower over the longer term. In the short term though, you should also keep in mind that the Bank of England has been talking about keeping their balance sheet fall, and in other words not selling off some of the bonds that they initially thought to do.
GBP/JPY Price Forecast Video 03.05.22
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