The overall outlook for GBP/JPY remains bearish, with price action favoring a drop below these support levels as the yen strengthens and market sentiment turns cautious following Japan’s CPI data. Expect continued volatility throughout the week, particularly as traders react to macroeconomic updates and shifting institutional flows. I expect the GBP/JPY pair to move lower in the coming sessions, largely driven by macroeconomic factors out of Japan and current price action dynamics.
Key Drivers:
1. Japan's CPI Decline:
Japan's Consumer Price Index (CPI) dropped from 2.4% to 2.0%, reflecting softer inflationary pressures. This reduces the likelihood of any imminent tightening measures from the Bank of Japan, potentially leading to further yen strength as the CPI miss could weaken the argument for monetary normalization. The yen's appreciation should drive GBP/JPY lower.
2. Technical Analysis:
- On the daily chart, GBP/JPY is trading near the key resistance level of 188. A break below this level could trigger further downside movement.
- On the weekly chart, there is potential for a move down to 185, which coincides with an important support zone. A breach of 185 would likely expose the next major support level around 180, a psychological barrier and key level for traders.
3. Institutional Activity:
Within an hour of the CPI release, institutional flows shifted decisively to the bearish side, a clear indication of how major market players are positioning themselves. This move reinforces the downside pressure and suggests that further bearish momentum could follow in the short term.
Short-Term Targets:
- First Support: 188 (key level)
- Next Support: 185 (near-term downside target)
- Further Support: 180 (longer-term support zone)
As the week unfolds, pay close attention to price action around the 188 and 185 levels for confirmation of continued bearish momentum, with 180 as the next major target.
Disclaimer:
The information provided in this projection is for informational purposes only and should not be considered as financial or investment advice. Forex trading involves substantial risk, and you should carefully consider your financial situation before participating in such markets. Past performance is not indicative of future results, and market conditions can change rapidly. I am not a licensed financial advisor, and this projection reflects my personal opinion based on current market data and analysis. You are advised to conduct your own research or consult a professional before making any trading decisions.
Key Drivers:
1. Japan's CPI Decline:
Japan's Consumer Price Index (CPI) dropped from 2.4% to 2.0%, reflecting softer inflationary pressures. This reduces the likelihood of any imminent tightening measures from the Bank of Japan, potentially leading to further yen strength as the CPI miss could weaken the argument for monetary normalization. The yen's appreciation should drive GBP/JPY lower.
2. Technical Analysis:
- On the daily chart, GBP/JPY is trading near the key resistance level of 188. A break below this level could trigger further downside movement.
- On the weekly chart, there is potential for a move down to 185, which coincides with an important support zone. A breach of 185 would likely expose the next major support level around 180, a psychological barrier and key level for traders.
3. Institutional Activity:
Within an hour of the CPI release, institutional flows shifted decisively to the bearish side, a clear indication of how major market players are positioning themselves. This move reinforces the downside pressure and suggests that further bearish momentum could follow in the short term.
Short-Term Targets:
- First Support: 188 (key level)
- Next Support: 185 (near-term downside target)
- Further Support: 180 (longer-term support zone)
As the week unfolds, pay close attention to price action around the 188 and 185 levels for confirmation of continued bearish momentum, with 180 as the next major target.
Disclaimer:
The information provided in this projection is for informational purposes only and should not be considered as financial or investment advice. Forex trading involves substantial risk, and you should carefully consider your financial situation before participating in such markets. Past performance is not indicative of future results, and market conditions can change rapidly. I am not a licensed financial advisor, and this projection reflects my personal opinion based on current market data and analysis. You are advised to conduct your own research or consult a professional before making any trading decisions.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.