GBP/JPY Forecast – British Pound Plunges Against Japanese Yen in Risk Off Move
GBP/JPY Forecast Video for 16.03.23
British Pound vs Japanese Yen Technical Analysis
The British pound initially tried to rally during the trading session on Wednesday, but ran into a buzz saw of concern, and then the next thing you know is that the Japanese yen started to take off. The reason for this is that bond yields around the world are dropping as traders are betting that a round of bailouts are coming. This releases pressure on the Bank of Japan when it comes to the idea of having to print more yen to keep their yield curve control in line, and that’s exactly what you are seeing on this chart.
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The ¥160 level has offered a little bit of support, but if we blow through there, it’s possible that the market could go down to the ¥157.50 level. In that area we would more likely than not see a significant amount of support. If we bounce from here, I don’t necessarily think that we are going to see a new bull market, just that we may have a bit of a consolidation area in the short term. Either way, volatility continues to be a major issue, and you will have to keep an eye on your positions. Now is not the time to be complacent with positioning, and therefore it’s crucial that you keep your position size reasonable.
At this point, the market will continue to be noisy more than anything else, and with that in mind you will have to understand that you need to look at the big picture. We are most certainly in an area that could be important, but it’s also worth noting that the British pound has underperformed against the yen when compared to multiple other currency pairs, so I would assume this might be a market that is softer than many others.
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