The GBP/JPY pared some of its gains after dismal UK GDP data. It hit a high of 192.67 at the time of writing and is currently trading around 192.24. Intraday trend is bullish as long as the support of 190.70 holds.
UK GDP Disappoints
The UK GDP fell unexpectedly by 0.1% in January 2025 as opposed to the predicted increase of 0.1%, mainly due to the fact that production decreased by 0.9%, predominantly manufacturing decreasing by 1.1%. Although there was a slight increase of 0.1% in service, construction also decreased by 0.2%. The said contraction has already been experienced in the market through the drop in the Pound Sterling. The surprise deceleration, after the 0.4% rise in December, reflects economic troubles and could shape policy reactions in the future
Technical Analysis Points to Further Downside
The GBP/JPY pair is trading above 34 and 55 EMA (Short-term) and 200 EMA (long-term on the 4-hour chart, confirming a bullish trend. Immediate resistance is at 193.20,a breach above this level targets of 193.77/194.60/195/196. Downside support is at 191.50 with additional levels at 190.80/189.80/188.75/188/187.25/186/185.
Market Indicators
CCI (50)- Bullish
Directional movement index - Bullish
It is recommended to buy on dips around 192 with a stop-loss at 191 for a TP of 195.
