Bullish Breeze for GBP/JPY: What Bailey's Speech Means for the Pound

The GBP/JPY  showed a minor pullback on board based Pound sterling buying. It hit an intraday high  of 197.67 and is currently trading around 197.668.  Intraday trend is bullish as long as support 196  holds.  

During his appearance before the House of Lords Economic Affairs Committee on June 24, 2025, Governor Andrew Bailey stated that there were clear indications of a softening in the UK labor market, although wage growth is still above the BOE's inflation target but is gradually decreasing. The speaker referred to the current interest rates as "constrictive" and stated that they are anticipated lower when inflation is lessened. Bailey declined to offer guidance on future policy due to significant global uncertainty and erratic events, such as oil price movements linked to geopolitical factors, advising against excessive caution. Quantitative tightening is not an active policy instrument; it seeks to bring central bank reserves down from almost £700 billion in 2009 to a neutral level of £550 billion, which would be the target. He also discussed the detrimental effects of worldwide economic disintegration on growth and productivity, pointing out that its impact on inflation is not clearly defined by the nature of disruptions.

‘The GBP/JPY pair is trading above  34 and 55 and 200 EMA (Short-term) and 365 EMA (long-term) on the 4-hour chart, confirming a bullish trend.  Any violation below 196.75 indicates the intraday trend is weak. A dip to 196/195/194/193.70 is possible.  Immediate resistance is at 198.25 a breach above this level targets of 200/202.

Market Indicators (4- hour)

CCI (50)- Bullish

Directional movement index - Neutral

Trading Strategy:  buy on dips

 It Is good to buy on dips around 197 with SL around 196  for a TP of 200.