Yen Strength Persists: GBP/JPY Faces Downward Pressure

GBPJPY is dropping in worth vs the Japanese Yen since the Federal Reserve in the US is expected to lower interest rates while the Bank of Japan might increase them. This increases the appeal of the yen for investors. One pound will get you 193.54 Yen today, having dropped as low as 193.44 earlier today. Experts expect this negative trend to persist as long as the price remains below 194.60.

 With the Fed keeping higher rates (4.25%-4.5%) and hinting at a conservative approach to rate cuts given ongoing inflation, the Federal Reserve and the Bank of Japan are on opposite monetary policy directions. The BOJ has kept its policy rate much lower (0.5%), but hinted at possible tightening. Particularly in the USD/JPY pair, this separation has affected currency volatility, with possible yen appreciation should the BOJ turn hawkish or the Fed become more dovish. Key drivers for investor strategies are market expectations and economic data releases in both countries, however some experts argue that the impact of this difference may be less strong than in past cycles because of more general global economic conditions.

The GBP/JPY pair is trading below   55 and  200 EMA (Short-term) and above  365 EMA (long-term on the 1-hour chart, confirming a mixed trend.  Any violation below 193.40  indicates the intraday trend is weak. A dip to 192.85/192/191.70/191 /190 is possible.  Immediate resistance is at 194.30, a breach above this level targets of 194.60/195/196.50/.

Market Indicators (1- hour)

CCI (50)- Bearish

Directional movement index - Bearish

Trading Strategy: Sell on rallies

 It Is good to sell on rallies around 194 with SL around 195 for a TP of 192.