The GBP/JPY currency pair surged above the 193 level on the weak yen. The pair hit a high of 193.41 yesterday and is currently trading at approximately 193.09. Notably, the Potential Reversal Zone (PRZ) is set at 200.20, indicating levels where traders may anticipate a potential price reversal.
The yen showed a minor sell-off despite strong Japanese GDP data. In the third quarter of 2024, Japan's GDP grew by 0.3%, beating expectations of 0.2%. Annually, the GDP rose by 1.2%, also higher than the forecast of 0.9%. Private consumption, which makes up over half of the economy, increased by 0.7%. Capital spending fell slightly by 0.1%, better than the expected decline. Although there were challenges from external demand and inflation, the data shows a promising recovery for Japan's economy.
From a technical standpoint, the GBP/JPY is trading above short-term and long-term moving averages, a clear indication of a prevailing uptrend. The immediate resistance level stands at 193.50. A breakout above this threshold could lead to further gains toward levels of 193.80/194.15/195.30/196.90/197.79. On the downside, support is positioned at 192.40 with additional levels of interest at 191.80/191.40/190.60/190/189.35, 188.50, 186.79, and 183 should the price fall further.
Analysis of key indicators such as the Commodity Channel Index (CCI) and Average Directional Index (ADX) suggests a bullish trend in the market.
Trading Strategy: Buy on dips
Considering the current technical and fundamental landscape, traders may want to adopt a strategy that involves buying on dips around the 193.05-08 mark, establishing a stop-loss (SL) around 192.40 The anticipated target prices for this approach could be 194.15/195.30.
