The Great British Pound/Japanese Yen currency pair (also referred to as GBPJPY and GBP/JPY) is one of the most actively traded in the world. In this article, we will examine how GBPJPY is performing.
GBPJPY Key Stats
- 2021 high: 158.21
- 2021 low: 139.68
- YTD high: 168.43
- YTD low: 150.97
- YTD % change: +6.53%
GBPJPY Forecast
The amazing bullish run for the Great British Pound/Japanese Yen pair in 2022 is less about the GBP’s strength and more to do with the JPY’s weakness. The pair continues to reach 2022 highs and is now at levels last seen in 2016. Looking ahead, we expect a continued rise in the near-term, with little a target around the 169.50 level.
Over the mid to long-term, we expect the price to continue up towards 175. However, there is a risk of intervention from the BoJ. They have so far only intervened in verbal form, stating they want to stability, but the calls for the BoJ to intervene are becoming louder. This provides a potential downside risk to the pair so it should be traded cautiously.
GBPJPY Fundamental Analysis
GBP is one of the largest traded global currencies in a market that moves trillions each day. Its price is dictated by several factors. In recent years these challenges have included Brexit and Covid-19. Brexit caused major altercations over trade deals, and Covid had an adverse effect on the UK economy. These will be important fundamentals to keep an eye on moving forward.
The JPY has been considered a safe haven and investors tend to invest in the currency during times of economic risk. In addition, the JPY is a valuable funding source for investments in other nations because of its low-interest rates. Therefore, financial risks may lead investors to unwind their positions in high yield assets and boost the JPY.
However, while the bove has been true in years gone by, the Japanese yen is having a terrible time in 2022. A surging dollar and concerns about the Japanese economy have seen the previous safe haven yen tumble.
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GBPJPY Technical Analysis
A discussion of the technical analysis for the currency pair, what the key price levels are, long-term support and resistance levels etc.
Support Levels
- 158.00
- 160.00
- 164.00
Resistance Levels:
- 174.94
- 173.50
- 169.55
Looking at the technical analysis of GBP/JPY, certain support levels are evident. 158.00 has recently acted as a resistance level. After finally being broken this year, it served as an excellent support level and may continue to do so. 160.00 has worked both short and long term, remaining strong since 2013. Although level 164.00 has failed to hold in recent months, throughout 2014 and mid-2016, the level acted as a convincing key area to watch.
As the GBP/JPY continues its impressive bullish run, it’s important to note some critical resistance levels. Initially, 167.95 had redirected the pair’s bullish run and was tested multiple times before its eventual break. On the other hand, technical level 169.55 has acted well as a support level in 2014 and is yet to be pushed over recent years. Furthermore, level 174.94 has not been tested since 2016, but with few breaks, it will be a crucial psychological level.
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