GBP/JPY: Buy or Sell?
ScoreThe GBP/JPY pair, often called 'The Dragon' for its high volatility, is a key cross-currency on the foreign exchange market. As of July 2025, the pair is trading around 198.64, having experienced significant fluctuations influenced by diverging economic policies and recent geopolitical events. This analysis provides a forecast for Canadian investors considering this emblematic pair for the remainder of the year.
Short-term forecast: Bearish correction toward 186.34 by October 2025.
Medium-term forecast: Continued pressure with a potential low around 183.04 by year-end.
Long-term forecast: A significant bullish trend is anticipated, with some projections reaching 209.28 by 2029.
Currently trading around 198.64, the GBP/JPY is at a critical juncture after a strong upward trend. Recent developments are creating a unique dynamic: a new UK-US economic agreement is supporting the Pound, while potential US tariffs on Japanese goods are weighing on the Yen. This policy and trade divergence is a key factor influencing the pair's direction. According to our analysis, the pair's recent climb to major resistance near 200.00, combined with short-term bearish technical signals, suggests a period of correction may be imminent. A potential downside objective could be the support level around 197.15, with further declines possible if bearish momentum continues.
L’essentiel à savoir sur GBP/JPY
The primary driver for GBP/JPY is the starkly different monetary policies of the Bank of England (BoE) and the Bank of Japan (BoJ). The BoE maintains a restrictive stance with higher interest rates to combat inflation, while the BoJ continues its accommodative policy with low rates, a divergence that fundamentally supports a stronger GBP over the JPY.
Recent geopolitical events have amplified this divergence. The UK has secured a favourable economic deal with the US, boosting the Pound. Conversely, the threat of US tariffs on Japanese imports has put the Yen under pressure, although its status as a 'safe-haven' asset could trigger sharp reversals during periods of global market stress.
Economic data remains a key catalyst. While the UK economy shows signs of stabilization with positive GDP and industrial production forecasts, Japan's weak wage data continues to be a drag on its currency. Upcoming central bank meetings, particularly the BoJ's on July 31st, will be critical to watch.
- ✅Exceptional volatility creates significant trading opportunities.
- ✅High liquidity ensures tight spreads and low transaction costs.
- ✅Strongly reacts to economic news, offering clear entry points.
- ✅Driven by a clear divergence in central bank policies.
- ✅Widely available for trading on all major Canadian platforms.
- ❌High volatility also significantly increases the risk of rapid, substantial losses.
- ❌Can be sensitive to sudden shifts in global risk-off sentiment.
Score- ✅Exceptional volatility creates significant trading opportunities.
- ✅High liquidity ensures tight spreads and low transaction costs.
- ✅Strongly reacts to economic news, offering clear entry points.
- ✅Driven by a clear divergence in central bank policies.
- ✅Widely available for trading on all major Canadian platforms.
GBP/JPY: Buy or Sell?
- ✅Exceptional volatility creates significant trading opportunities.
- ✅High liquidity ensures tight spreads and low transaction costs.
- ✅Strongly reacts to economic news, offering clear entry points.
- ✅Driven by a clear divergence in central bank policies.
- ✅Widely available for trading on all major Canadian platforms.
- ❌High volatility also significantly increases the risk of rapid, substantial losses.
- ❌Can be sensitive to sudden shifts in global risk-off sentiment.
Score- ✅Exceptional volatility creates significant trading opportunities.
- ✅High liquidity ensures tight spreads and low transaction costs.
- ✅Strongly reacts to economic news, offering clear entry points.
- ✅Driven by a clear divergence in central bank policies.
- ✅Widely available for trading on all major Canadian platforms.
Medium-term forecast: Continued pressure with a potential low around 183.04 by year-end.
Long-term forecast: A significant bullish trend is anticipated, with some projections reaching 209.28 by 2029. Currently trading around 198.64, the GBP/JPY is at a critical juncture after a strong upward trend. Recent developments are creating a unique dynamic: a new UK-US economic agreement is supporting the Pound, while potential US tariffs on Japanese goods are weighing on the Yen. This policy and trade divergence is a key factor influencing the pair's direction. According to our analysis, the pair's recent climb to major resistance near 200.00, combined with short-term bearish technical signals, suggests a period of correction may be imminent. A potential downside objective could be the support level around 197.15, with further declines possible if bearish momentum continues. L’essentiel à savoir sur GBP/JPY The primary driver for GBP/JPY is the starkly different monetary policies of the Bank of England (BoE) and the Bank of Japan (BoJ). The BoE maintains a restrictive stance with higher interest rates to combat inflation, while the BoJ continues its accommodative policy with low rates, a divergence that fundamentally supports a stronger GBP over the JPY. Recent geopolitical events have amplified this divergence. The UK has secured a favourable economic deal with the US, boosting the Pound. Conversely, the threat of US tariffs on Japanese imports has put the Yen under pressure, although its status as a 'safe-haven' asset could trigger sharp reversals during periods of global market stress. Economic data remains a key catalyst. While the UK economy shows signs of stabilization with positive GDP and industrial production forecasts, Japan's weak wage data continues to be a drag on its currency. Upcoming central bank meetings, particularly the BoJ's on July 31st, will be critical to watch.
- GBP/JPY in brief
- Price: Trend and Real-Time Chart
- GBP/JPY Forecast: Should You Invest in This Currency Pair?
- Trading Profile: How to Trade the Pair Effectively?
- Our Top 10 Tips for Trading the GBP/JPY
- How to trade the GBP/JPY pair?
- The Latest News on the Pair
- FAQ
Why trust Hellosafe?
At HelloSafe, our expert has been monitoring the GBP/JPY pair for over three years. Every month, hundreds of thousands of users in France trust us to analyze market trends and identify the best investment opportunities. Our analyses are published for informational purposes only and do not constitute investment advice.
GBP/JPY in brief
| Element | Detail |
|---|---|
| 📛 Pair Name | GBP/JPY |
| 🗂️ Pair Type | Minor Pair (Cross-Currency) |
| 🌍 Regions Involved | United Kingdom / Japan |
| 💶 Base Currency | GBP (British Pound) |
| 💵 Quote Currency | JPY (Japanese Yen) |
| 📊 1-Month Change | +1.37% |
| 📉 Average Volatility | High |
| 📈 12-Month High | 208.91 JPY |
| 📉 12-Month Low | 180.09 JPY |
| 💹 Current Price | 198.64 JPY (as of July 10, 2025) |
Price: Trend and Real-Time Chart
The GBP/JPY currency pair, often nicknamed "The Dragon" or "Geppy," is one of the most volatile and closely watched crosses in the forex market. It serves as a powerful barometer of global economic health and risk appetite, reflecting the contrast between the UK's service-driven economy and Japan's export-oriented powerhouse. The pair's price action is primarily driven by the divergence in monetary policies between the Bank of England (BoE) and the Bank of Japan (BoJ), key economic data releases (such as inflation and GDP), and the broader geopolitical context which influences investor sentiment.
| Period | Approximate Rate Level | Variation (%) |
|---|---|---|
| 1 week | ~197.93 JPY | +0.36% |
| 1 month | ~195.95 JPY | +1.37% |
| Since January 1st | ~194.62 JPY | +2.07% |
| Over 12 months | High: 208.91 / Low: 180.09 | -3.68% |
The pair's average daily volatility over the last 30 days has been around 245 pips (based on the Average True Range indicator). This high level of daily movement makes GBP/JPY particularly attractive to active traders, such as day traders and scalpers, as it provides frequent opportunities to enter and exit positions for potential profit. However, this same volatility also significantly increases risk, demanding a disciplined approach to risk management, including the use of tight stop-loss orders.
Recently, the GBP/JPY has been trading within a long-term ascending channel, testing major resistance near the one-year highs around the 199.00 - 200.00 JPY psychological zone. While the fundamental backdrop of monetary policy divergence between the hawkish Bank of England and the dovish Bank of Japan provides underlying support, short-term momentum has shown signs of slowing. Technical indicators are currently flashing bearish signals, suggesting a potential for a corrective pullback or consolidation before the next directional move.
GBP/JPY Forecast: Should You Invest in This Currency Pair?
As of mid-2025, the GBP/JPY pair is at a critical juncture, defined by a stark divergence in monetary policy and significant technical levels. While the Bank of England maintains a restrictive stance to curb inflation, the Bank of Japan continues its accommodative policy, creating a fundamental tailwind for the pair. However, after a strong upward trend, the cross is now testing major resistance near its one-year highs, with recent volatility fueled by geopolitical trade tensions. This sets the stage for a potential major move, making a thorough analysis essential.
Fundamental analysis
The primary driver for GBP/JPY remains the significant difference in interest rate policies. The Bank of England (BoE) is holding its rate at 4.25% in its fight against inflation, while the Bank of Japan (BoJ) keeps its rate near zero (0.5%), prioritizing economic stimulus. This wide interest rate differential makes holding the Pound Sterling more attractive than the Japanese Yen, providing strong underlying support for the pair. Furthermore, recent geopolitical events have favoured the GBP over the JPY; a new UK-US economic prosperity agreement stands in contrast to US tariff threats against Japanese imports, pressuring the Yen. However, the JPY's status as a "safe-haven" currency means it can strengthen rapidly during periods of global market uncertainty.
Key economic publications to watch:
- Bank of Japan (BoJ) Policy Meetings: Decisions on interest rates and quantitative easing (next meeting: July 31).
- Bank of England (BoE) Policy Meetings: Statements and decisions on the UK's bank rate.
- UK Economic Data: Monthly GDP, inflation (CPI), and employment figures.
- Japanese Economic Data: National CPI, Tankan survey, and wage growth data.
- Global Risk Sentiment: Developments in international trade and geopolitical stability.
Good to know
The GBP/JPY is highly sensitive to global risk sentiment. During "risk-on" periods, when investors are confident, they often sell the safe-haven JPY to invest in higher-yielding assets, causing GBP/JPY to rise. This often results in a positive correlation with major stock indices like the S&P 500 and the FTSE 100.
Technical analysis
From a technical standpoint, GBP/JPY has been trading within a clear long-term ascending channel. It is currently challenging a major multi-month resistance zone between 199.00 and the psychological level of 200.00 JPY. A sustained break above this area would signal a continuation of the bullish trend.
Key technical levels to monitor are:
- Resistance: The primary hurdle is the 199.00 - 200.00 JPY zone. A breakout above this could open the path toward the 52-week high of 208.91 JPY.
- Support: Immediate support lies at the 21-day EMA around 197.15 JPY. A break below this level could trigger a deeper correction towards the next significant support at 196.75 JPY and the 200-day moving average near 197.87 JPY.
Technical indicators present a mixed picture. Momentum indicators like the RSI (at 42.6) and MACD are showing bearish signals on the daily chart, suggesting that the recent bullish momentum is waning and a pullback is possible. Most short-term moving averages also signal a potential downturn. However, the price remains above its 200-day moving average, confirming that the long-term uptrend is still technically intact. This divergence suggests that the pair is in a consolidation phase, with a potential for either a bullish breakout or a bearish rejection at current levels.
Trading Profile: How to Trade the Pair Effectively?
The GBP/JPY pair, often nicknamed "The Dragon" or "The Beast" by traders, is one of the most popular currency crosses in the Forex market. Its popularity stems from its consistently high volatility, which creates significant trading opportunities for those able to manage the associated risk. As a cross between two major global currencies—the British Pound and the Japanese Yen—it offers excellent liquidity, ensuring that traders can enter and exit positions with relative ease and at most times of the day.
Recommended trading strategy
| Trading Style | Relevance on GBP/JPY | Why? |
|---|---|---|
| Scalping | High risk | While the pair's large price swings offer opportunities, its volatility can lead to wider spreads and slippage, making it challenging for scalpers who target very small profits. |
| Day trading | High | Excellent choice. The significant intraday ranges provide ample opportunities to capture profitable moves within a single trading session, especially during peak volatility hours. |
| Swing trading | Very high | Ideal. GBP/JPY is known for developing strong, multi-day or multi-week trends driven by monetary policy divergence and risk sentiment. This suits traders who hold positions for several days. |
| Long term | Moderate | Possible for patient investors, but it requires managing significant volatility over time. A solid understanding of the fundamental drivers from the UK and Japan is essential. |
Maximum volatility hours
The pair's activity peaks when both the London and Tokyo or London and New York markets are open.
| Time Slot (CET) | Activity Level |
|---|---|
| 09:00 - 11:00 | High (London session open) |
| 11:00 - 14:00 | Moderate |
| 14:00 - 18:00 | Very High (London/New York overlap) |
| 18:00 - 00:00 | Decreasing |
Expert tip
For active day traders in Canada, the most opportune window is the London and New York session overlap, which typically occurs between 8:00 AM and 12:00 PM EST. This period consistently offers the highest liquidity and the largest price movements.
Liquidity and traded volume
- Average daily volume: GBP/JPY is a highly traded cross, with daily volumes often exceeding the equivalent of $50 billion. The report notes a recent tick volume of 176.34K on a specific platform, indicating strong activity.
- Market share: While not as large as major pairs like EUR/USD, the GBP/JPY cross is a significant component of the global Forex market, accounting for a notable percentage of daily turnover.
- Typical spreads: Due to its high volatility, spreads on GBP/JPY are generally wider than on major pairs, typically ranging from 1.5 to 3 pips with standard brokerage accounts, but this can vary.
Recommended leverage and risk management
In Canada, the Canadian Investment Regulatory Organization (CIRO) sets the rules for margin and leverage. For a highly volatile pair like GBP/JPY, brokers typically offer a maximum leverage of around 20:1 to 30:1, but it is crucial to use it wisely.
- Beginner: Use low leverage, no more than 5:1. Focus on learning the pair's behavior without taking on excessive risk.
- Intermediate: You may consider leverage up to 10:1 or 15:1 once you have a proven, profitable strategy and solid risk controls.
- Advanced: Experienced traders may use leverage up to the regulatory limit (e.g., 20:1 or higher), but only as part of a well-defined strategy and with a deep understanding of the risks involved.
Watch out!
Regardless of your experience level, risk management is non-negotiable. Always use a stop-loss order on every trade to define your maximum acceptable loss. As a rule of thumb, never risk more than 1-2% of your total trading capital on a single position.
Our Top 10 Tips for Trading the GBP/JPY
| Advice | Why it's important |
|---|---|
| 1. Respect its volatility | Nicknamed "The Dragon," GBP/JPY is one of the most volatile currency pairs. A single day's movement can exceed 150-200 pips, so you must adjust your expectations and risk accordingly. |
| 2. Use strict risk management | Always use a stop-loss order. Due to its sharp and rapid movements, positions can turn against you quickly. Risking a small percentage (e.g., 1-2%) of your capital per trade is essential. |
| 3. Monitor central bank policies | The divergence between the Bank of England's (BoE) and the Bank of Japan's (BoJ) monetary policies is a primary driver of the long-term trend. Pay close attention to their announcements. |
| 4. Understand risk sentiment | The Japanese Yen (JPY) is a "safe-haven" currency. During global uncertainty (risk-off), investors buy JPY, causing GBP/JPY to fall. In times of stability (risk-on), the pair tends to rise. |
| 5. Use leverage with extreme caution | High volatility combined with high leverage is a recipe for disaster. Using lower leverage than you might with other pairs can help you withstand the wider price swings without facing a margin call. |
| 6. Trade during optimal hours | The highest liquidity occurs during the London trading session and the overlap with the Tokyo session (approx. 3 AM to 4 AM EST). Trading during these times usually means tighter spreads and more volume. |
| 7. Focus on higher timeframes | While day trading is possible, the clearest trends on GBP/JPY often appear on the 4-hour, daily, and weekly charts. Use these to establish a directional bias before looking for entries. |
| 8. Watch key psychological levels | Round numbers (e.g., 198.00, 199.00, 200.00) often act as significant psychological support and resistance levels where price action tends to stall or reverse. |
| 9. Do not chase parabolic moves | This pair is known for strong, extended moves, but chasing the price after a huge run increases your risk of buying at the top or selling at the bottom just before a sharp reversal. |
| 10. Keep an eye on correlations | GBP/JPY's direction is often influenced by the broader movements of pairs like GBP/USD and USD/JPY. Analyzing them can sometimes provide additional clues. |
Effective strategies for GBP/JPY
| Strategy | Description | Relevance on GBP/JPY |
|---|---|---|
| Breakout Trading | Identifying key consolidation patterns (like ranges or triangles) and entering a trade when the price breaks decisively through a support or resistance level. | Highly relevant. The pair's high volatility means that once it breaks out of a range, it often triggers a strong and sustained trend, offering significant profit potential. |
| Technical Rebound | Trading within a defined range by buying near a strong support level and selling near a strong resistance level, often confirmed with oscillators like the RSI or Stochastics. | Moderately relevant. While possible during periods of consolidation, this strategy is riskier on GBP/JPY because its volatility can lead to false signals and unexpected breakouts. |
| News-Based Trading | Placing trades based on the outcome of major economic announcements, such as UK GDP data, inflation reports, or BoJ policy statements. | Very relevant. GBP/JPY is extremely sensitive to economic news. These events act as major catalysts that can create immense volatility and clear directional moves. |
| Moving Average Strategy | Using moving average crossovers (e.g., 20 EMA crossing 50 EMA) or using MAs as dynamic support and resistance to identify and follow trends. | Highly relevant. Given that GBP/JPY is a trending pair, moving averages are excellent tools for confirming the direction of the underlying trend and finding entry points in alignment with it. |
Backtests and historical behaviors
The GBP/JPY is characterized by specific historical patterns that can inform a trading approach. Its historical variation zone is exceptionally wide; looking at 52-week ranges often reveals swings of 2,000 to 3,000 pips (e.g., from 180.00 to over 208.00), highlighting its high-risk, high-reward nature. In terms of seasonality, the pair's performance is often tied to global risk sentiment, which can show patterns around fiscal year-ends (March for Japan) or calendar year-ends, though these are not guaranteed.
The average performance per month can be highly erratic, with some months seeing quiet consolidation and others producing explosive trends of over 1,000 pips. It is not uncommon for the pair to gain or lose over 5% in a single month. Historically, the most volatile days of the week are typically Tuesday, Wednesday, and Thursday, especially when major economic data is scheduled for release from either the UK or Japan, and during the London-Tokyo session overlap.
How to trade the GBP/JPY pair?
| Step | Description |
|---|---|
| Choose a reliable broker | Select a broker regulated by the Canadian Investment Regulatory Organization (CIRO). Ensure they offer competitive spreads, fast execution, and a stable platform, which are critical for trading the highly volatile GBP/JPY pair. |
| Understand the fundamentals | Follow key economic drivers: Bank of England (BoE) and Bank of Japan (BoJ) interest rate decisions, inflation (CPI), and GDP data. GBP/JPY is a risk barometer, so monitor global risk sentiment; it tends to rise in "risk-on" environments and fall in "risk-off" periods as investors flock to the safe-haven JPY. |
| Analyze the charts | Use technical analysis to identify trends and entry/exit points. Focus on key support and resistance levels, trend lines, and chart patterns. Utilize indicators like the RSI to spot overbought/oversold conditions and the MACD to gauge momentum and potential trend reversals. |
| Define your trading strategy | Choose a strategy that suits GBP/JPY's characteristics. Its high volatility and strong trends make it suitable for swing trading (capturing multi-day moves), trend following, and breakout strategies. Develop clear rules for when to enter and exit trades. |
| Place your orders and manage risk | Implement strict risk management. Always use a stop-loss order to define your maximum loss. Use take-profit orders to secure gains. Crucially, practice proper position sizing: never risk more than 1-2% of your trading capital on a single trade to protect your account from the pair's sharp moves. |
| Monitor your positions and adjust if necessary | Actively manage your trades. Stay updated on economic news that could impact GBP or JPY. Consider using trailing stops to lock in profits as a trade moves in your favour. Keep a trading journal to review your performance and continuously refine your strategy. |
The Latest News on the Pair
On July 8, 2025, the announcement of impending 25% U.S. tariffs on all Japanese imports, set to begin August 1st, placed significant downward pressure on the Japanese Yen. This news acted as a major catalyst for GBP/JPY, as the weakening Yen caused the pair to surge higher, breaking through the 199.00 level and testing its recent highs. The development underscored the Yen's vulnerability to international trade disputes, directly contributing to the pair's bullish momentum.
On July 3, 2025, the British Pound gained strength following reports that the United Kingdom had secured a strategic economic deal with the United States, providing exemptions from key tariffs on steel and automobiles. This positive news bolstered confidence in the UK economy, causing the GBP to appreciate broadly. For the GBP/JPY pair, this resulted in a sustained push upwards, helping it to consolidate above the 198.50 support level as the Pound's strength compounded the Yen's weakness.
On June 12, 2025, the release of the UK's monthly GDP figures showed an unexpected contraction of 0.3%, disappointing market expectations and raising concerns about the health of the British economy. In the immediate aftermath, the Pound Sterling sold off, causing the GBP/JPY to experience a sharp but brief dip from its daily highs near 199.20 down toward the 198.40 level before finding renewed buying interest. The event highlighted the Pound's sensitivity to domestic economic data.
On June 25, 2025, official data from Japan revealed that wage growth remained sluggish, reinforcing expectations that the Bank of Japan would not move to tighten its ultra-loose monetary policy anytime soon. This fundamental weakness in the Japanese economy weighed on the Yen, providing a supportive floor for the GBP/JPY. The news helped the pair maintain its elevated position, preventing any significant sell-offs and allowing it to build a base above the critical 198.00 level.
FAQ
What is the current trend of GBP/JPY?
The current trend for GBP/JPY is broadly bullish, with the pair trading within a long-term ascending channel and hovering near its yearly highs. This upward momentum is fundamentally driven by the significant divergence in monetary policy between the restrictive Bank of England and the accommodative Bank of Japan. However, the pair is currently testing major psychological resistance around the 200.00 JPY level, with short-term indicators suggesting a potential slowdown or consolidation, while key support holds at 197.15 JPY.
Is it a good time to buy GBP/JPY?
This is a challenging time to enter a new position, as the long-term uptrend is clashing with major technical resistance and signs of short-term exhaustion. For aggressive traders, a sustained break and close above the 200.00 JPY resistance could signal a continuation of the bullish trend. Conversely, a rejection at this level could present opportunities for bearish traders, especially if the price breaks below the 197.15 JPY support. Given the high volatility and current uncertainty, cautious traders may prefer to wait for a clearer directional signal.
Can you trade GBP/JPY with a small capital?
While it is possible, trading GBP/JPY with a small capital is extremely risky and generally not recommended for beginners. The pair is famous for its high volatility—earning it the nickname "the Dragon"—which means price can move rapidly by a large number of pips, leading to substantial losses if not managed correctly. If you choose to trade it, you must use very low leverage, trade with micro-lots to reduce your exposure, and implement a non-negotiable stop-loss on every single trade to protect your account.
What are the best hours to trade GBP/JPY?
The optimal time to trade GBP/JPY is during the overlap of the Tokyo and London trading sessions, which occurs between 8:00 AM and 9:00 AM GMT. This one-hour window typically sees the highest liquidity and volatility, as major players from both markets are active, resulting in tighter spreads and more significant price movements. The opening hours of the London session are also a key period of activity for this pair, often setting the tone for the rest of the European trading day.
What strategy works best on this pair?
Given its high volatility and tendency to form strong, extended trends, GBP/JPY responds well to trend-following and breakout strategies. Traders often use long-term moving averages (like the 200-day MA) to confirm the primary direction and look for entries after a breakout from a consolidation pattern or key level, such as the 200.00 resistance. Because of its large price swings, using an indicator like the Average True Range (ATR) is crucial for setting appropriately wide stop-losses that can withstand normal volatility.
What is the current trend of GBP/JPY?
The current trend for GBP/JPY is broadly bullish, with the pair trading within a long-term ascending channel and hovering near its yearly highs. This upward momentum is fundamentally driven by the significant divergence in monetary policy between the restrictive Bank of England and the accommodative Bank of Japan. However, the pair is currently testing major psychological resistance around the 200.00 JPY level, with short-term indicators suggesting a potential slowdown or consolidation, while key support holds at 197.15 JPY.
Is it a good time to buy GBP/JPY?
This is a challenging time to enter a new position, as the long-term uptrend is clashing with major technical resistance and signs of short-term exhaustion. For aggressive traders, a sustained break and close above the 200.00 JPY resistance could signal a continuation of the bullish trend. Conversely, a rejection at this level could present opportunities for bearish traders, especially if the price breaks below the 197.15 JPY support. Given the high volatility and current uncertainty, cautious traders may prefer to wait for a clearer directional signal.
Can you trade GBP/JPY with a small capital?
While it is possible, trading GBP/JPY with a small capital is extremely risky and generally not recommended for beginners. The pair is famous for its high volatility—earning it the nickname "the Dragon"—which means price can move rapidly by a large number of pips, leading to substantial losses if not managed correctly. If you choose to trade it, you must use very low leverage, trade with micro-lots to reduce your exposure, and implement a non-negotiable stop-loss on every single trade to protect your account.
What are the best hours to trade GBP/JPY?
The optimal time to trade GBP/JPY is during the overlap of the Tokyo and London trading sessions, which occurs between 8:00 AM and 9:00 AM GMT. This one-hour window typically sees the highest liquidity and volatility, as major players from both markets are active, resulting in tighter spreads and more significant price movements. The opening hours of the London session are also a key period of activity for this pair, often setting the tone for the rest of the European trading day.
What strategy works best on this pair?
Given its high volatility and tendency to form strong, extended trends, GBP/JPY responds well to trend-following and breakout strategies. Traders often use long-term moving averages (like the 200-day MA) to confirm the primary direction and look for entries after a breakout from a consolidation pattern or key level, such as the 200.00 resistance. Because of its large price swings, using an indicator like the Average True Range (ATR) is crucial for setting appropriately wide stop-losses that can withstand normal volatility.
