Currency Trading Analysis By forum.forex

GBP/JPY Price Forecast Nov-26, 2021

The ¥152.50 level being broken above would be a huge victory for the buyers, and at this point it looks very possible. As far as selling is concerned, we need to break down below the 200 day EMA to truly fall apart. At that point, we would almost certainly test the ¥150 level, which is what I look at as the “floor in the market” for the buyers. Breaking down below all of that would send this into a massive downtrend, or than likely causing massive destruction.

The pair is highly sensitive to risk appetite, which of course is waning at the moment. Nonetheless, if we do find ourselves breaking above there, then it is very likely that the entire thing would have been shrugged off as far as the virus is concerned, which is something that the markets have done multiple times. Because of this, I remain optimistic, but I also recognize you probably have to deal with quite a bit of volatility in the process of trying to recover. Quite frankly, the biggest regret I have on this is that I was not awake to see it touched the 200 day EMA.

For USD/JPY, the road ahead in the first quarter of 2022 will likely remain heavily glued to market expectations of how hawkish the Federal Reserve will be. In December, the central bank doubled the pace of tapering asset purchases, which will now see it end in early 2022. This will likely give the central bank maneuverability should it need to raise rates sooner than expected.

This will of course depend on how inflation evolves. Headline price growth is at its fastest pace in almost 40 years in the United States. Expectations are that price growth will remain above the central bank’s target next year, with Core PCE running around 2.7% in 2022. However, a key risk could come if inflation expectations become “de-anchored.”

USD/JPY

Current level – 115.86

At the time of writing, the currency pair is consolidating in the range between 115.51 – 116.32 as the inertia of the bulls was thwarted at the beginning of this year’s trading. The current depreciation of the greenback against the yen could be seen as a corrective move unless the bears fail to overcome the support at 115.51. In the event of such a pessimistic scenario, we could witness a further deepening of the sell-off towards the support area at 115.18.