GBP/JPY Slides After Weak UK GDP—Bears Target Sub-198 Levels

The GBP/JPY  pared some of its gains after dismal UK GDP data. It hit an intraday low of  198.70 and is currently trading around 198.88.  Intraday trend is bearish as long as the resistance at 200  holds.

Following a 0. 3% drop in April and missing market predictions of 0. 1% rise, UK GDP unexpectedly decreased by 0. 1% month over month in May 2025. Following a 0. 3% drop in April, this is the second consecutive monthly contraction; conceUK GDP surprisingly decreased by 0. 1% month-over-month in May 2025, missing market predictions of 0. 1% growth. This is the second straight monthly decline, which begs questions about a possible overall Q2 slowdown. Although the services industry expanded moderately, major decreases in industrial output (-0- 9%), manufacturing (0%), and construction (-0.6%) were the major drags on performance. If the economic downturn persists, the weaker-than-expected data could fuel speculation about a possible Bank of England rate reduction. The main drags on performance were notable declines in industrial output (-0.9%), manufacturing (-1.0%), and construction (-0.6%), even though the services sector experienced minor growth. Should the economic slowdown persist, the less-than-expected results might spark ideas on a likely Bank of England rate cut.

The GBP/JPY pair is trading below  55 and above 200 EMA (Short-term) and 365 EMA (long-term) on the 1-hour chart, confirming a mixed trend.  Any violation below 198.70 indicates the intraday trend is weak. A dip to 198.25/197.70/196.70/196.25/195.25/194/193.70 is possible.  Immediate resistance is at 200 a breach above this level targets of 202/204.

Market Indicators (60-min chart)

CCI (50)- Bearish

Directional movement index - Bearish

Trading Strategy:  Sell

 
 It Is good to sell on rallies around 199  with SL around 200  for a TP of 197.40/195.