The GBP/JPY currency pair jumped sharply after an upbeat UK CPI. It hit a high of 197.79 and is currently trading around 197.60. The Potential Reversal Zone (PRZ) is set at 200.20.
The UK Consumer Price Index (CPI) data for October 2024 has been released, showing notable inflation trends:
- Headline CPI: Increased to 2.3% year-over-year, up from 1.7% in September.
- Core CPI: Rose to 3.3% year-over-year, compared to 3.1% in September.
These increases indicate ongoing inflation pressures above the Bank of England’s (BoE) target of 2.0%. This could affect the BoE's decisions on monetary policy, particularly regarding future interest rate cuts.
Market reactions to this news may include speculation that the BoE could pause its plans to lower rates, which could impact the British Pound’s value against other currencies.
Technical Overview:
The GBP/JPY is trading above both short-term and long-term moving averages, which suggests a major uptrend. The immediate resistance level is at 198. If the price breaks this level, it could rise toward 199/200.20. Support is at 196.80 and if that fails, the price could drop to 196/195/194.30/193.60/192.95/191.80.
Indicator Analysis:
The CCI and ADX indicators suggest a bullish trend.
Trading Recommendation:
Consider buying on dips around 197 with SL around 196 and aim for a target price of 199.
