GBP/JPY Soars as Trump Calls for Global Rate Cuts: Trade Insights and Technical Analysis

The GBP/JPY trades higher on board-based Pound sterling. It hit a high of  194.76 and is currently trading around 194.48. The intraday trend is bullish as long as support 193 holds.

Trump's Urgent Call: Interest Rate Cuts to Revive the U.S. Economy

Donald Trump has just called for interest rate cuts, effective now, in a speech at the World Economic Forum in Davos, Switzerland. He argues that rates need to fall everywhere in the world as oil prices drop and America's economy needs to be jolted out of its recent funk. It's the latest jab in a war of words between Trump and the Federal Reserve, particularly Fed Chair Jerome Powell, whom Trump has attacked repeatedly in the past. He also pointed out the investment of $1 trillion from Saudi Arabia into the US. He said that a drop in the oil price would bring peace to Russia and Ukraine, thus reiterating the need for a cut in the rates. However, experts on Wall Street do not think to reduce the rate immediately and said that it may be retained at 4.25-4.50% by the Federal Reserve, given inflation. The Fed is set to announce its decision soon, and markets are anticipating a careful response amid Trump's demands.

Technical Analysis of GBP/JPY

The GBP/JPY pair is trading above 34 and 55 EMA (Short-term) and 200 EMA (long-term) on the 4-hour chart, confirming an overall downtrend. Immediate resistance is at 195; a breach above this level targets 195/195.60/196.25/197. Downside support is at 193.75 with additional levels at 193/192/191.39/190/188.70/188.

Market Indicators

CCI (50)- Bullish

Directional movement index - Neutral

 It is recommended to buy on dips around 193.45-47 with a stop-loss at 192.75 for a TP of 197.