UK Inflation Data Weighs on GBP/JPY: Selling Opportunity Below 192.85?

GBP/JPY declined slightly after the UK CPI. It hit an intraday low of 192.92 and is currently trading around 193.12. The intraday trend is bearish as long as resistance 195 holds.

The UK's April 2025 CPI inflation surged to 3.5%, exceeding expectations and marking a one-year high, with the broader CPIH measure reaching 4.1%. This spike, driven by seasonal household bill increases—particularly a 26.1% month-on-month rise in water and sewerage prices—and policy changes like the National Living Wage increase have complicated the Bank of England’s monetary policy outlook. While the Bank of England anticipates a temporary surge, projecting inflation to fall to around 2.4% by Q2 2026 and below the 2% target by 2027, the sharper-than-expected rise has introduced renewed uncertainty regarding future interest rate cuts, emphasizing the need for caution.

The GBP/JPY pair is trading below  55 and above 200 EMA (Short-term) and  365 EMA (long-term on the 4-hour chart, confirming a bearish trend.  Immediate resistance is at 194, a breach above this level targets of 194.70/195/196.50.  Any breach below 192.85 confirms the intraday bearish trend.  A dip to 192.35/191.70.

Market Indicators (1- hour)

CCI (50)- Bearish

Directional movement index - Bearish

Trading Strategy: Sell on rallies

 It Is good to sell below 192.85  with SL around 193.30  for a TP of 191.70.