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GBP/JPY Forecast: Buying Opportunity Beckons – 08 February 2023

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At this point, it’s likely that we would see caution be the better part of valor.

The Japanese yen-denominated pears all gapped higher to kick off the week on Monday, but Tuesday turned around to fall rather significantly.The British pound was no different from the yen, but we have since seen it stabilize a bit.The question now is going to be whether we have enough support underneath the turn things around, and if we do, then this might be a nice buying opportunity as we have been in such a major consolidation range.


The yen is a popular asset during turbulent times.

The ?155 level is underneath his major support, while the ?162 level is above his major resistance. We have been in this range for a while, and it is worth noting that perhaps the moving averages near the ?162 level should be paid close attention to. After all, it is the 50-Day EMA and the 200-Day EMA indicators, both of which are widely followed.

This is also a pair that’s highly sensitive to risk appetite so that is something worth keeping an eye on as well. The market continues to be very noisy, and therefore you should probably be cautious with your position sizing because we have such violent moves. However, I do think that given enough time we probably have to make a bigger decision. The market breaking down below the ?155 level gets this thing rocking to the downside, perhaps opening a move all the way down to the ?150 level. On the other hand, if we can break all the resistance above, and clear the ?162 level, it’s likely that we go looking toward the ?167 level, where we had fallen so hard previously.

Looking at this chart, I think you continue to see a lot of volatility, and as a result, I think you need to be very cautious with your position sizing. However, the market is likely to continue to see a lot of erratic moves, and therefore you could have big gains rather quickly, or you could have big losses. At this point, it’s likely that we would see caution be the better part of valor. With this, we are closer to the bottom of the range, so I am willing to put a small position on for a long, but I’m not overly concerned about trying to get too big in the short term. If the trade starts to work out of my favor, I will simply add along the way.

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