British Pound vs Japanese Yen Technical Analysis
The British pound rallied a bit during the trading session on Friday to show signs of strength again, as the ¥165 level is now getting violated. By doing so, the market then allows the market to go much higher, as this is a major breach of resistance. Ultimately, this is a market that I think is going to continue to go higher but looking for a little bit of a pullback is probably the best way to approach it. After all, you do not want to “chase the trade.”
The ¥162.50 level could be an area of support, and therefore I think it is only a matter of time before we see some type of value hunting in that area. The market is most obviously bullish, and of course, the fact that the Bank of Japan continues to do quantitative easing to fight interest rates is going to continue to work against the value of the yen. That being said, the market is more likely than not going to continue seeing plenty of correlation to the risk appetite situation as well.
If we do continue to go much higher, it is eventually going to run out of momentum. The market is more likely than not getting a little overextended, but that does not necessarily mean that I would short this market anytime soon. In fact, I would not necessarily look to short this market until we get below the ¥160 level, which I think is the “floor in the market.”
This would obviously be a major change in attitude, and I suspect that it would take some type of huge fundamental news to make that happen, something that would be very “risk-off” and obvious.
GBP/JPY Price Forecast Video 18.04.22
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