GBP/JPY: Navigating Gains and Setbacks Amid Weak Pound and PMI Declines!

The GBP/JPY pared some of its gains on weak pound sterling. The pair breaks the significant resistance of 196 after a long consolidation and hits multi high of 198.44  and is currently trading around 195.901.

The UK flash PMI data for October 2024 shows declines in both the manufacturing and services sectors. The Composite PMI fell to 51.7, its lowest in 11 months, down from 52.6 in September. The Services PMI decreased to 51.8, below the expected 52.4, while the Manufacturing PMI dropped to 50.3, also below expectations and marking a six-month low.

Technical Overview:

At present, the GBP/JPY holds above the short-term 34 EMA, the 55 EMA (195.04 and 194.78), and the long-term 365 Hull MA (195.82) on the 4-hour chart. Immediate resistance is evident around 198.50; breaking through this level could indicate a continuation of the bullish trend. A rise towards 200 is achievable. Conversely, immediate support sits at 196 (resistance turned into support), and a drop below this threshold could lead the pair toward the 195, 194.50, 194, 193.70, and 192.50 levels.

Indicator Analysis (4-hour chart):

1. CCI (50): Bullish
2. ADX: Bullish

All indicators confirm an overall bullish trend.

It is recommended to consider buying on dips around 196 with a stop loss around 195.40, targeting profit levels of 197.37 or 198.