The GBP/JPY currency pair pared most of its gains on weak Pound sterling. It hit a low of 194.29 and is currently trading around 195.21. The Potential Reversal Zone (PRZ) is set at 200.20.
Last week, the UK released disappointing GDP data, showing a growth rate of only 0.2% for the third quarter, which was below the expected 0.4%. This underwhelming performance has raised concerns about the country's economic health and recovery after the pandemic, contributing to a negative market sentiment. Analysts expect GDP to grow by another 0.2% in September, as consumer spending and service activities are gradually improving.
Technical Overview:
The GBP/JPY is trading below both short-term and long-term moving averages, which suggests a major downtrend. The immediate resistance level is at 196. If the price breaks this level, it could rise toward 196.40/197/197.57/198.10. Support is at 194 and if that fails, the price could drop to 193.60/192.95/191.80.
Indicator Analysis:
The CCI and ADX indicators suggest a bearish trend.
Trading Recommendation:
Consider selling on rallies around 196 with SL around 197.25 and aim for a target price of 193.
