GBP/JPY: Bullish Momentum Holds Despite BoE's Dovish Stance

The GBP/JPY  gained more than 80 pips from yesterday’s low on weak yen. It hit an intraday high of  198.93 and is currently trading around 198.87.  Intraday trend is bullish as long as support 198 holds.

The Bank of England is signaling imminent interest rate cuts, with the next decision set for August 7, 2025, and Governor Andrew Bailey indicating a "downward" trajectory, especially if economic and job market weakness persists; economists largely expect a 25-basis-point reduction to 4.00% in August, with potential for another cut by year-end to around 3.75%, though the BoE remains data-dependent to balance economic support with inflation control.

The GBP/JPY pair is trading above  55 and 200 EMA (Short-term) and 365 EMA (long-term) on the 4-hour chart, confirming a bullish trend.  Any violation below 198 indicates the intraday trend is weak. A dip to 197.70/196.70/196.25/195.25/194/193.70 is possible.  Immediate resistance is at 199.25, a breach above this level targets 199.60/200/202/204.

Market Indicators (4-hour chart)

CCI (50)- Bullish

Directional movement index - neutral

Trading Strategy:  Buy

 
 It is good to buy on dips around 198.70-75 with SL around 198  for a TP of 202.