The GBP/JPY currency pair pared most of its gains on weak Pound sterling. The pair hit a high of 195.18 yesterday and is currently trading at approximately 193.18. Notably, the Potential Reversal Zone (PRZ) is set at 200.20, indicating levels where traders may anticipate a potential price reversal.
The UK's GDP shows a slight growth of 0.1% for October 2024, following a contraction of -0.1% in September 2024. This recent increase comes after a growth of 0.2% in August, indicating some recovery. The September decline was unexpected and was mainly due to lower production and stagnant services. Ongoing challenges like high inflation and low business investment are affecting the economy and may influence future policies and consumer confidence.
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 195. A breakout above this threshold could lead to further gains toward levels of 195.30/196.90/197.79. On the downside, support is positioned at 193.70 with additional levels of interest at 193/ 192.50/191.80/191.40/190.60/190/189.35, 188.50, 186.79, and 183 should the price fall further.
Analysis of key indicators such as the Commodity Channel Index (CCI)- Bullish and Average Directional Index (ADX)- Neutral.
Trading Strategy: Buy on dips
Considering the current technical and fundamental landscape, traders may want to adopt a strategy that involves sell on rallies around the 194 mark, establishing a stop-loss (SL) around 195 . The anticipated target prices for this approach could be 192/190.
