GBP/JPY Weekly Forecast – British Pound Continues to Find Buyers at ¥180

GBP/JPY Forecast Video for 24.07.23

British Pound vs Japanese Yen Weekly Technical Analysis

The British pound initially fell during the week, but has found quite a bit of support at the ¥180 level yet again. This is an area that I think continues to hold and this is the 2^nd week in a row that we have ended up forming a hammer. This suggests to me that we are not only going to see a lot of support underneath, but we may not get a significant pullback before continuing a rally. We may just simply continue to bounce around in this consolidation range, basically between the ¥180 and the ¥184 levels, before taking off to the upside.

Even if we were to break down below the bottom of the last couple of weeks, there is a massive amount of support at the ¥175 level, assuming that we can even get down there. The Bank of Japan has reiterated its loose monetary policy while the Bank of England has to fight inflation, and therefore will be extraordinarily tight. You get paid quite a bit to simply sit on this pair, so a lot of traders are holding in as an investment. Interest rate differential and swap does matter over the longer term, because it acts as a dividend, something that you get quite a bit of in this currency pair.

If we can break above the ¥185 level, then I anticipate that the market will finally make another move to the ¥187.50 level, followed by the ¥190 level. Longer-term, I still believe that this pair could go as high as ¥200, something that we haven’t seen in ages when it comes to “The Dragon.”

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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