GBP/JPY Forecast – British Pound Has Wild Ride Against the Japanese Yen
GBP/JPY Forecast Video for 02.12.22
British Pound vs Japanese Yen Technical Analysis
The British pound does not seem to know what it wants to do at this point, at least against the Japanese yen. We have had long wicks on both sides of these 2 last daily candlesticks, showing that there is a big fight going on right now, and quite frankly nobody really knows what to do. This shouldn’t be much of a surprise, because quite frankly there are a lot of moving pieces right now and therefore risk appetite is all over the place. Keep in mind that this pair is highly sensitive to risk appetite regardless, so that can never be forgotten.
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The bank of England has stated already that they expect the United Kingdom to go into a 2 year recession, and therefore the British pound is a bit soft in general. However, the Bank of Japan continues its yield curve control scheme, meaning that it is essentially printing unlimited yen to buy unlimited bonds.
That keeps the Japanese yen soft, so therefore we have a fight between a couple of currencies that have a lot of headwinds. That being said, the Japanese yen is much softer than the British pound is over all, so I think by default, you would have to assume that this pair continues to go higher over the longer term.
This is not to say that it’s going to be easy, quite frankly I do not think it will be at all. However, buying on dips probably get you paid more often than not in this market. If we do break down below the bottom of the hammer from the session, then we could go looking to the 200-Day EMA, but I think the ¥165 level itself is pretty supportive.
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