FxWirePro- GBPJPY Trade Idea

Technical Insights

The GBP/JPY showed a nice pullback on the strong pound sterling. It hit an intraday high of 193.17 and is currently trading around 192.77. Intraday trend is bullish as long as support 189.30 holds.

President Donald Trump announced he would put a 30-day hold on tariffs for imports from Mexico and Canada following fruitful talks with the leaders of the two countries. Mexico agreed to deploy 10,000 National Guard troops along the U.S.-Mexico border to combat drug trafficking, while Canada has committed to enhancing security along its borders. The development triggered positive reactions in global markets as U.S. stocks rose. But the administration has confirmed that a 10% tariff on Chinese imports will indeed go forward. Overall, this is an extension of the issues in U.S. trade policy as the administration addresses the issues of immigration and security.

The UK Manufacturing PMI for January 2025 is 48.3, which means that the manufacturing sector continues to contract, but at a slower pace than in December. Input prices have risen sharply, adding pressure on manufacturers, especially smaller companies. Business optimism is low, with challenges in both local and international markets.

Technical Analysis of GBP/JPY

The GBP/JPY pair is trading above 34 and 55 EMA (Short-term) and below 200 EMA (long-term) on the 4-hour chart, confirming a mixed trend. Immediate resistance is at 193.36; a breach above this level targets of 194/195/195.60/196.25/197. Downside support is at 192.50 with additional levels at 191.78/191/ 190/189.30/188.70/188.

Market Indicators

CCI (50)- Neutral

Directional movement index - Neutral

 It is recommended to buy on dips around 192.18-20 with a stop-loss at 191 for a TP of 195.