GBPJPY GBP/JPY Analysis Summary
Technical Analysis
- Trend: GBP/JPY is in an uptrend, with the 10, 50, and 200 EMAs indicating bullish momentum. Price has recently been trading above these EMAs, suggesting continued upward pressure.
- Resistance and Support: Resistance is near 198.80 and 199.35, while support can be found around the 198.00 level, which aligns with the buy zone.
- Indicators: The Squeeze Momentum Indicator (SQZMOM) shows bullish momentum with green bars, but it’s not at extreme levels, indicating a steady rather than sharp increase in buying power.
Fundamental Analysis
- Bank of England (BoE): The BoE has been raising interest rates in response to inflation, supporting a stronger pound. UK inflation has recently slowed but remains a consideration for future policy adjustments.
- Bank of Japan (BoJ): The BoJ continues its dovish stance, with no immediate plans to raise interest rates, as confirmed by BoJ board member Adachi. This policy divergence between the BoE and BoJ favors GBP/JPY long positions.
- Market Sentiment: Traders expect GBP/JPY to maintain an upward trajectory, with some forecasts suggesting it could reach 203 by the end of 2024 if fundamentals remain favorable.
Trade Plan
- Buy Zone: Enter at 198.00 - 198.50.
- Stop Loss: Set at 197.00
- Take Profit:
- First TP: 199.80 (near resistance).
- Second TP: 202.00 (for a more extended bullish target).
This setup leverages the strong technical trend and fundamental support from the BoE-BoJ policy gap. Keep an eye on unexpected policy changes, particularly from Japan.
