GBP/JPY Bullish Despite UK Economic Concerns: Spring Statement and Technicals Point to Upside

The GBP/JPY is trading flat with no proper direction.  It hits an intraday  high  of 194.49 and is currently trading around 194.27. Intraday trend is bullish as long as support 193 holds.

UK Chancellor Rachel Reeves highlighted adjustments to economic and fiscal policies in the Spring Statement on March 26, 2025, with tax rises and austerity to meet the five-year budget balance, and put off announcements of major new taxes until the Autumn Budget. The OBR reduced the GDP growth rate in 2025 by half to 1.0% but marginally upgraded forecasts for future years. A further £2.2 billion was put towards defense, to 2.5% of GDP by 2027, paid for through foreign aid and Treasury reserve cuts. Though welfare budget reductions were tempered, income tax band freezes will raise household taxes. Reeves recognized the difficulty for companies with increasing National Insurance and employment legislation. The government's decisions are meant to provide security in the face of international dynamics, demonstrating a prudent fiscal strategy balancing growth and budgetary pressures

Technical Analysis Points to Further Upside

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 bullish trend.  Immediate resistance is at 195, a breach above this level targets 196/196.80/198. Downside support is at 193.45 with additional levels at 193.45/193//192.45/191.70/191/189.80/188.75/188/187.25/186/185.

Market Indicators

CCI (50)- Bullish

Directional movement index - Neutral

 It is recommended to buy on dips around 193.50 with a stop-loss at 193 for a TP of 196/197.