GBP/JPY Forecast Today 26/9: Tests Major Resistance (Video)
Date
9/26/2024 2:51:23 PM
(MENAFN- Daily Forex)
The first thing I see is that the British pound is doing everything it can to break out against the Japanese yen. The 193.50 yen level is an area that I think a lot of people look at as a major barrier. If we could break above that level and continue to go much higher, then I think you've got a situation where the yen just gets eviscerated against pretty much almost everything.
The 193.50 yen level is an area that's been important multiple times in the past, and the fact that we find ourselves in that general vicinity at the moment does suggest that we are likely to continue to see more of a buy on the at least in the short term.
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If the market truly takes off above that level, then I could see the British pound traveling all the way to the 198.50 yen level and possibly even higher than that. Keep in mind that the interest rate situation in Japan is very low and it more likely than not will stay there. Their last interest rate decision was to do nothing. And it's very possible that you have a situation where traders continue to look at the massive amount of debt in Japan, keeping the Bank of Japan from raising rates.
So, all things being equal, the W pattern here, I think suggests that we are in the midst of a bottoming pattern as well. The measured move, if you will, is for about 5.5% on a breakout, and that could actually put us as high as 204 yen, but I think that's a longer term grinding kind of just bouncing around and buying the dip on short term charts type of trend. I don't have any interest in shorting this pair, at least not at the moment. If nothing else, I will be hanging on to this position in order to collect swap for the longer-term run.
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