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GBP/JPY Forecast – British Pound Pulls Back Against Yen

British Pound vs Japanese Yen Technical Analysis

The British pound has pulled back a bit against the Japanese yen during thin trading on Thursday, as America was away for Thanksgiving. Ultimately, this is a market that may have run out a bit ahead of itself, but this pullback will more likely than not only offer a bit of an opportunity for debt buyers to come back in and pick up “cheap pounds.”

Keep in mind that the Bank of Japan continues to buy unlimited bonds, which is the same thing is flooding the market with yen. Furthermore, the British pound continues to rally against the US dollar, which of course is the measuring stick of potential strength or weakness when it comes to a currency in general. With that being said, we did get a little ahead of ourselves so I think this pullback is healthy, and I would anticipate a bit of buying pressure sooner rather than later. Because of this, I like the idea of waiting for a supportive looking candle and getting longer again.

The ¥165 level underneath should be a hard floor in the market, but we also have the 50-Day EMA sitting near the ¥166 level, so I think there’s plenty of technical reasons to believe that this market will hold up given enough time. Looking at this chart, I think that we will eventually try to test the ¥170 level, although it may take some time to get there. Breaking above there opens up the possibility of a move back to the highs at the ¥172 level. We are in an uptrend, although it is a very choppy one. There is no point in fighting it.

For a look at all of today’s economic events, check out our economic calendar.

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