GBP/JPY Soars on Weak Yen Amidst Hawkish Fed Stance

The GBP/JPY gained sharply due to the weak yen. It hit an intraday high of 191.33 and is currently trading around 191.18. Intraday trend is bullish as long as support 188 holds.

Federal Reserve's Position on Interest Rates

Congressman Jerome Powell reiterated that the Federal Reserve is not in a hurry to lower interest rates, given the strength of the economy. The speaker emphasized that the policy position is now much less restrictive than it was before, and with the economy still in good shape, there is no need to hurry to change our policy. Key points from Powell's testimony: Powell indicated that there was no compelling reason to cut interest rates, given the economy's stability and inflation levels above the Fed's 2% target. Additionally. Powell mentioned that the economy is continuing to grow at a positive pace. Hawkish comments from Powell pushed USDJPY prices higher.

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 a bearish trend. Immediate resistance is at 191.50; a breach above this level targets of 192.21/193/193.36/194/195/195.60/196.25/197. Downside support is at 190.35 with additional levels at 189.80/189/188.

Market Indicators

CCI (50)- Neutral

Directional movement index - Neutral

 It is recommended to buy on dips around 190.48-50 with a stop-loss at 189.80 for a TP of 193.