FxWirePro- GBPJPY Trade Idea

The GBP/JPY trades weak on board-based Pound weakness. It hit an intraday low of 191.61 and is currently trading around 191.818. Intraday trend is bearish as long as resistance 193 holds.

Market expectations are that the Bank of England (BoE) is going to reduce interest rates in 2025 because of concerns over the growth of the economy and inflation. Analysts expect the BoE to lower the rate five times, which would bring down the current rate from 4.75% to around 3.5% by the end of the year. The UK economy is slowing down with growth forecasts reduced to 0.9%. Although inflation has just fallen to 2.5%, the prospect of rising again may mean that the BoE is keen on reviving the economy. The February 6, 2025, BoE meeting will be crucial because there is a strong possibility that an immediate rate cut will take place.

Technical Analysis of GBP/JPY

The GBP/JPY pair is trading below 34 and 55 EMA (Short-term) and 200 EMA (long term ) on the 4-hour chart, confirms a overall bearish trend. Immediate resistance is at 192.85; a breach above this level targets of 193.36/194/195/195.60/196.25/197. Downside support is at 191 with additional levels at 190/188.70/188.

Market Indicators

CCI (50)- Bearish

Directional movement index - Neutral

 It is recommended to sell on rallies around 192.18-20 with a stop-loss at 194.10 for a TP of 188.