GBP/JPY Plunge: Policy Divergence and Bearish Signals

The GBP/JPY  trades weak on policy divergence between BOE and BOJ. It hits an intraday low of 188.15 and is currently trading around 188.66. Intraday trend is bearish as long as resistance support 190 holds.
 

Dhingra's Dovish Stance Amplifies Concerns

Bank of England MPC member Swati Dhingra is urging the faster loosening of monetary policy stringency in a warning about the risk of anemic UK consumer spending and its knock-on impact on economic growth. Dhingra emphasizes that monetary policy is currently too tight, contributing to untypically soft consumption compared to the rest of Europe. She has been in support of more aggressive interest rate cuts to stimulate economic activity, having voted in February 2025 in opposition to a half-point cut. Dhingra contends that 25 basis point rate cuts every quarter would maintain the policy stance as restrictive until 2025, thereby slowing down economic recovery. Her overall position focuses on the requirement for a strong policy shift to boost consumption and underpin economic growth in the UK

Technical Analysis Points to Further Downside 

The GBP/JPY pair is trading below  34 and 55 EMA (Short-term) and 200 EMA (long-term) on the 4-hour chart, confirming a bearish trend. Immediate resistance is at 189; a breach above this level targets 189.65-/190/190.64/191/192. Any close above 192 in the 4-hour chart confirms further bullishness. Downside support is at 188 with additional levels at 187.25/186/185.

Market Indicators

CCI (50)- Bearish

Directional movement index - Bearish

 It is recommended to sell on rallies around 189.18-20 with a stop-loss at 190 for a TP of 187/185.