GBP/JPY is shaping up as one of the clearest “macro-meets-technical” opportunities into the end of the week. With UK policy expectations turning more dovish while Japan’s tightening risk remains live, the fundamental backdrop continues to favor downside pressure in the cross. Add in elevated event risk around central bank communication and key macro prints, and GBP/JPY becomes a prime candidate for a structured, risk-defined trade plan rather than discretionary chasing. Our focus is therefore on selling strength into clearly defined resistance, with invalidation placed beyond the most likely stop-sweep zone, and targets mapped to the next high-probability liquidity pockets below. GBPJPY Trade Setup: Pair / Asset Bias & Entries Stop / Invalidation Targets Why A+ (Fundamentals, Technicals, Sentiment) Near-term catalysts (UK time) GBP/JPY SHORT – Bearish – Sell 208.20 – 208.95 (sell any post-BoE spike into supply). Add on break & hold <207.30 209.60 (above post-event squeeze zone / stops likely above 209.00) T1: 206.32 T2: 205.76 T3: 203.80 Fundamentals: BoE expected to cut while BoJ expected to hike (policy divergence hits GBP vs JPY). Technicals: Failure below 208.95 resistance with downside roadmap toward 207.35/206.32/205.76. Sentiment: GBP positioning is increasingly net-short (bearish GBP), while JPY still net-long but less crowded than earlier (room for JPY bid into BoJ). Thurs 18th Dec: BoE rate decision at 12:00 UK time. Chart by TradingView – GBPJPY Trade Setup – 18th Dec 2025 Conclusion Our GBP/JPY setup qualifies as A+ because it aligns all three pillars: fundamentals (policy divergence skewing GBP weaker versus JPY), technicals (sell-the-rally into resistance with clean downside waypoints), and sentiment/positioning (a market backdrop that favors downside continuation when volatility hits). Execution is straightforward: patience on entries is key, allow price to rally into supply or confirm the breakdown before committing risk. If invalidation is triggered, the thesis is wrong and we step aside; if downside triggers print, the trade offers a favorable asymmetry into the next stop/target zones. As always, the goal is not to predict every tick, but to participate only when the market confirms our highest-conviction scenario. This analysis is for informational purposes only and does not constitute investment advice. Trading involves risk; manage exposure accordingly. For similar FX Trade Setups please visit our FX Trade Ideas page. Please visit our Disclaimer page. Disclaimer Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. TerraBullMarkets.com does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets or any financial instrument involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of TerraBullMarkets.com nor any of its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page. TerraBullMarkets.com and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. TerraBullMarkets.com and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted. The author and TerraBullMarkets.com are not registered investment advisors and nothing in this article is intended to be investment advice. TerraBullMarkets...
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