The GBP/JPY pared some of its gains on weak UK CPI data. It hit a high of 192.98 yesterday and is currently trading around 191.65. Intraday trend is bearish as long as resistance 193 holds.
CPI Data Insights
Consumer Price Index data for December 2024 in the UK reflected a drop in inflation to 2.5% year-on-year, down from 2.6% in November. Experts had forecast an increase to 2.7%. However, consumer prices still rose by 0.3% in December, less than what was forecast at 0.4%. Meanwhile, the fall in producer prices eased to 1.5% year-on-year, indicating that production costs are stabilizing. These trends can advise future decisions by the Bank of England on monetary policy.
Technical Analysis of GBP/JPY
The GBP/JPY pair is trading below 34 and 55 EMA (Short-term) and 200 EMA (long-term) on the 4-hour chart, confirming an overall downtrend. Immediate resistance is at 192.50; a breach above this level targets of 193/193.51/194.52/195/195.60/196.25/197. Downside support is at 191.50 with additional levels at 191/190.
Market Indicators
CCI (50)- Bearish
Directional movement index - Bearish
It is recommended to sell on rallies around 192 with a stop-loss at 193 for a TP of 190.
