FxWirePro- GBPJPY trade idea

The GBP/JPY  gained slightly as risk sentiment improved.  It hit a high of 193.17 at the time of writing and is currently trading around 193.03. Intraday trend is bullish as long as the support of 190.70 holds.

Following the announcement of China's stimulus plan, the marginal depreciation of the Japanese Yen (JPY) is a culmination of various factors. Improved global market sentiment and increased risk appetite may induce investors to leave safe-haven currencies like the Yen. Being a significant trading partner to Japan, the improved Chinese economy may be reflected in increased trade, but short-term benefits will accrue to China by preference. Less economic uncertainty from the stimulus would also lower the attractiveness of the Yen as a safe-haven currency. Expectations of monetary policy in Japan are largely derived from domestic circumstances and global trends, but shifts in these expectations will also influence currency levels

Technical Analysis Points to Further Downside 

The GBP/JPY pair is trading above  34 and 55 EMA (Short-term) and 200 EMA (long-term on the 4-hour chart, confirming a bullish trend. Immediate resistance is at 193.20,a breach above this level targets of 193.77/194.60/195/196. Downside support is at 191.50 with additional levels at 190.80/189.80/188.75/188/187.25/186/185.

Market Indicators

CCI (50)- Bullish

Directional movement index - Bullish

 It is recommended to buy on dips around 192 with a stop-loss at 191 for a TP of 195.