Ethereum Drops Below $2,400: Will Market Sentiment Pull ETH Lower in February 2025?

Cryptocurrency

Summary:

On February 25, 2025, the Ethereum market (ETH/USDT) recorded strong fluctuations, with the price falling to 2,427.67, down 0.2% from the high of 2,450.00 at the beginning of the week.

SELL ETH-USDT

Close Time

CLOSED

2425.89

Entry Price

2400.00

2460.00

3091.43 +6.87 +0.22%

341.1

Pips

Loss

2400.00

2460.00

Exit Price

2425.89

Entry Price

2460.00

Overview

On February 25, 2025, the ETH/USDT price traded around 2,427.67, down slightly but within the strong volatility trend of the cryptocurrency market. This decline reflects pressure from the macroeconomic context and global market sentiment. The Fed continues to maintain interest rates at 5.25% - 5.50%, with the US CPI in January 2025 rising to 3.2%, higher than the forecast of 3.0%, increasing the opportunity cost of risky assets such as cryptocurrencies. The DXY index rose 0.8% to 106.50, strengthening the USD and putting pressure on selling digital assets.

In addition, the cryptocurrency market was affected by concerns about legal regulations. The EU has just passed a new MiCA law, tightening regulations on stablecoins and cryptocurrency transactions, reducing confidence in ETH. On-chain data shows that ETH transaction volume decreased by 15% in the week, reaching $12 billion/day, the lowest in 2 months, while the number of active wallets decreased by 10%, down to 1.2 million/day. WTI oil prices are stable at $78.50/barrel, but rising gas prices in the US increase mining costs, indirectly affecting the operating costs of the Ethereum network. Market sentiment was also affected by the decline of Bitcoin (BTC) below $50,000, dragging altcoins like ETH down.

Market psychology

Market sentiment on February 25, 2025 in the crypto sector tilted to pessimism, with the Crypto Fear Greed Index (VIX) falling to 25, the “extreme fear” zone, reflecting concerns about regulation and the global economy. Large investors withdrew funds from ETH, with withdrawals from exchanges like Binance increasing 18% on the week to $500 million, while inflows into stablecoin USDT increased 12% to $15 billion. Data from Glassnode shows that hedge funds like Three Arrows Capital and Grayscale reduced their ETH positions and moved to USD and BTC, reinforcing the downward pressure on ETH/USDT.

ETH/USDT trading volume in the market decreased by 20%, reaching $8 billion/day, the lowest in 3 months, while ETH's Volatility Index increased to 45%, the highest since November 2024, reflecting the instability. A report from CoinShares on February 24, 2025 predicted that ETH could fall another 5-7% if the Fed continues its hawkish signals, but if US inflation data weakens, ETH could recover to $2,600 by the end of March 2025. This sentiment shows that investors are positioning their portfolios to minimize risks, putting great pressure on ETH/USDT.

Technical analysis

Ethereum Falls Below $2,400: Will Market Sentiment Pull ETH Lower in February 2025?

On the ETH/USDT chart on 25/02/2025, the price fell to 2,427.67, below the MA50 (2,450.00) and MA200 (2,480.00). Important support is at 2,400.00 (January 2025 low) and resistance is at 2,450.00 (MA50). RSI is at 35, in the oversold zone (below 40), but there is no sign of bullish divergence, indicating that the bearish pressure has not exhausted itself. Bollinger Bands are expanding with the price touching the lower band at 2,420.00, signaling high volatility. MACD is below zero, with the histogram at -0.0020, confirming the downtrend, but momentum could slow if the price meets strong support.

If price breaks 2,400.00, next target is 2,350.00; if it breaks 2,450.00, a test of 2,480.00 is possible. The current downtrend is supported by increasing trading volume and bearish crossovers of moving averages.

Trading Recommendations

Short at 2,427.67, take profit at 2,400.00, stop loss at 2,460.00. Note the risk from US inflation data next week and the moves of large hedge funds, manage risk at 1-2% of the account to cope with volatility from the crypto market or legal regulations.

ETH/USDT on 25/02/2025 fell sharply due to pressure from the Fed, regulations, and bearish market sentiment. Technical trends reinforce the bearish scenario, but investors need to be cautious with upcoming economic data and market movements, and manage risks closely amid high volatility.

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

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Adam

Forex

Summary:

On February 25, 2025, the EUR/CAD market witnessed a decline, trading around 1.4625, down 0.4% from the high of 1.4700 earlier in the week. Key factors include the potential easing of the European Central Bank (ECB) policy...

BUY EURCAD

EXP

EXPIRED

1.50000

Entry Price

1.50500

1.49000

1.61650 +0.00031 +0.02%

Pips

EXPIRED

1.49000

1.50845

Exit Price

1.50000

Entry Price

1.50500

Overview

On February 25, 2025, EUR/CAD traded around 1.4625, falling sharply due to monetary policy pressure and weak Eurozone economic data. The ECB kept interest rates at 0.50%, but Eurozone inflation fell to 2.3%, close to the 2% target, raising expectations that the ECB would cut interest rates in Q2/2025. Eurozone GDP in Q4/2024 grew by just 0.3%, lower than the forecast of 0.5%, with the manufacturing PMI falling to 45.7, below the 50 threshold, putting downward pressure on the EUR.

In contrast, the Bank of Canada (BoC) kept interest rates at 4.00%, but GDP in Q4/2024 increased by 0.8%, higher than the forecast of 0.6%, and inflation was stable at 2.8%, supporting CAD as a safe asset. Canada's manufacturing PMI in February 2025 reached 48.0, lower than the forecast of 49.0, but WTI oil prices were stable at $78.50/barrel, maintaining CAD's strength thanks to energy exports. Geopolitical tensions in Europe, especially the conflict in Ukraine, weakened the EUR, while CAD was strengthened by stable Canadian economic data and its role as a haven in the North American region.

The interest rate differential between EUR and CAD, along with market sentiment, pushed EUR/CAD lower, with expectations of ECB easing in the short term.

Market psychology

Market sentiment on February 25, 2025 was skewed to anxiety, with the VIX at 22 and the Fear Greed Index falling to 27, reflecting concerns about the global economy. Investors turned to CAD as a safe-haven asset on solid Canadian economic data, while the EUR sold off on the weak economic outlook for the Eurozone. CME Group data showed that EUR/CAD futures short volume increased 23% for the week, with large funds such as TD Bank reducing their EUR positions and increasing CAD, reinforcing the downward pressure on the pair.

CAD trading volumes in the forex market increased by 15%, especially in the EUR/CAD pair, with daily volumes reaching $110 billion, a two-month high. In contrast, the EUR lost strength, with the EUR's relative strength index against the G10 currency basket falling to its lowest level since December 2024. A report from Scotiabank on February 24, 2025 predicted that EUR/CAD could fall another 1-2% if the ECB signals easing, but if the BoC maintains a hawkish stance, CAD could recover slightly, easing the downward pressure.

Technical analysis

Can the Euro Recover from Pressure from the ECB and BoC?_1

On the EUR/CAD chart on 25/02/2025, the price dropped sharply to 1.4625, below the MA50 (1.4670) and MA200 (1.4720). Important support is at 1.4600 (January 2025 low) and resistance is at 1.4670 (MA50). RSI is at 31, in the oversold zone (below 30), but has not shown any signs of recovery, indicating that the bearish pressure has not yet exhausted itself. Bollinger Bands are expanding with the price touching the lower band at 1.4610, signaling high volatility. MACD is below zero, with the histogram at -0.0012, confirming the downtrend, but momentum may slow if the price meets strong support.

If price breaks 1.4600, next target is 1.4550; if it breaks 1.4670, a test of 1.4720 is possible. The current downtrend is supported by increasing volume and bearish crossovers of moving averages.

Trading Recommendations

Entry: 1.5000

TP: 1,505

SL: 1.4900

Note risks from ECB decision 27/02/2025 and Canadian employment data, manage risk at 1-2% of account to deal with volatility from energy market or geopolitics.

EUR/CAD fell sharply on 25/02/2025 due to weak Eurozone economy and CAD's increasing role as a safe haven. Technical trends reinforce the bearish scenario, but investors need to be cautious with the upcoming ECB decision and economic data, and manage risks closely in volatile markets.

Risk Warnings and Disclaimers

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Adam

Forex

Summary:

On February 25, 2025, the CAD/CHF market experienced significant volatility, falling to 0.6249, down 0.5% from a high of 0.6300 earlier in the week. Key factors included the neutral policy of the Swiss National Bank (SNB)..

SELL USDCHF

EXP

EXPIRED

0.62300

Entry Price

0.62000

0.62900

0.79582 +0.00060 +0.08%

Pips

EXPIRED

0.62000

0.89442

Exit Price

0.62300

Entry Price

0.62900

Overview

On February 25, 2025, the CAD/CHF price traded around 0.6249, falling sharply due to pressure from monetary policy and weak Canadian economic data. The Bank of Canada (BoC) maintained interest rates at 4.00%, but GDP in the fourth quarter of 2024 increased by only 0.6%, lower than the forecast of 0.8%, while inflation fell to 2.8%, raising concerns that the BoC may ease policy early. The Canadian manufacturing PMI in February 2025 fell to 48.0, below the threshold of 50, indicating that the industry continued to shrink, putting downward pressure on the CAD.

In contrast, the Swiss National Bank (SNB) kept its interest rate at 1.25%, neutral, but the CHF was reinforced as a safe asset by stable economic data. The Swiss manufacturing PMI in February 2025 reached 51.5, higher than the forecast of 50.8, and exports increased by 4.0% thanks to demand from the EU, supporting the CHF. Geopolitical tensions in Europe, especially the conflict in Ukraine, increased the CHF's safe-haven role, while WTI oil prices fell slightly to $78.00/barrel, negatively affecting the CAD, which depends on energy exports.

The interest rate differential between CAD and CHF, along with market sentiment, pushed CAD/CHF lower, with expectations that the SNB could keep its policy neutral for at least the next 3 months.

Market psychology

Market sentiment on February 25, 2025 was skewed toward anxiety, with the VIX at 22 and the Fear Greed Index falling to 27, reflecting concerns about the global economy. Investors turned to CHF as a safe-haven asset on the back of solid Swiss economic data, while CAD was sold off on the weak Canadian economic outlook. CME Group data showed that CAD/CHF futures short volume rose 22% for the week, with major funds such as UBS reducing their CAD positions and increasing CHF, reinforcing the downward pressure on the pair.

CHF trading volumes in the forex market increased by 18%, especially in the CAD/CHF pair, with volumes reaching $90 billion/day, a two-month high. In contrast, the CAD lost strength, with the CAD's relative strength index against the G10 currency basket falling to its lowest level since November 2024. A report from Credit Suisse on February 24, 2025 predicted that CAD/CHF could fall another 1-2% if the BoC signals easing, but if the SNB raises interest rates, the CHF could recover slightly, reducing the downward pressure.

Technical analysis

CAD/CHF Drops Below 0.6250: Will the Swiss Franc Continue to Dominate CAD Ahead of Economic Data?_1

On the CAD/CHF chart on 25/02/2025, the price dropped sharply to 0.6249, below the MA50 (0.6280) and MA200 (0.6320). Important support is at 0.6200 (January 2025 low) and resistance is at 0.6280 (MA50). RSI is at 32, in the oversold zone (below 30), but has not shown any signs of recovery, indicating that the bearish pressure has not yet exhausted itself. Bollinger Bands are expanding with the price touching the lower band at 0.6230, signaling high volatility. MACD is below zero, with the histogram at -0.0010, confirming the downtrend, but momentum may slow if the price meets strong support.

If price breaks 0.6200, next target is 0.6150; if it breaks 0.6280, test 0.6320 is possible. The current downtrend is supported by increasing trading volume and bearish crossover of moving averages.

Trading Recommendations

Entry: 0.6230

TP: 0.6200

SL: 0.6290

Note risks from SNB decision 27/02/2025 and Canadian employment data, manage risk at 1-2% of account to deal with volatility from energy market or geopolitics.

CAD/CHF on 25/02/2025 fell sharply due to weak Canadian economy and CHF increasing its safe-haven role. Technical trends reinforce the bearish scenario, but investors need to be cautious with the upcoming SNB decision and economic data, and manage risks closely in volatile markets.

Risk Warnings and Disclaimers

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Adam

Forex

Economic

Summary:

On February 25, 2025, the AUD/JPY market witnessed a sharp decline, trading around 94.254, down 0.7% from the high of 95.000 at the beginning of the week. Key factors included the tightening policy of the Bank of Japan (BoJ) and weak economic data in Australia...

SELL AUDJPY

Close Time

CLOSED

94.220

Entry Price

94.000

94.700

103.653 -0.018 -0.02%

48.0

Pips

Loss

94.000

94.702

Exit Price

94.220

Entry Price

94.700

Overview

On February 25, 2025, the AUD/JPY price traded around 94.254, falling sharply due to pressure from monetary policy and weak Australian economic data. The Reserve Bank of Australia (RBA) maintained interest rates at 4.35%, the highest in 13 years, but GDP in the fourth quarter of 2024 increased by only 0.7%, lower than the forecast of 0.9%, while inflation fell to 3.5%, raising concerns that the RBA may ease policy early. The Australian manufacturing PMI in February 2025 fell to 47.5, below the threshold of 50, indicating that the industry continued to shrink, putting downward pressure on the AUD.

In contrast, the BoJ maintained its easing policy with a 0.1% interest rate, but signaled its readiness to raise rates if inflation stabilizes above 2%. Japanese economic data showed that the manufacturing PMI reached 50.3, higher than the forecast of 50.0, and exports increased by 3.0% thanks to demand from ASEAN, reinforcing the JPY as a safe-haven asset. Geopolitical tensions in East Asia, especially the conflict in the South China Sea, increased the JPY's safe-haven role, while Japanese gas prices increased by 8% due to import dependence, supporting the JPY further. The interest rate differential between AUD and JPY, combined with market sentiment, pushed AUD/JPY lower.

Market psychology

Market sentiment on 25/02/2025 was skewed to anxiety, with the VIX at 22 and the Fear Greed Index falling to 28, reflecting concerns about the global economy. Investors turned to the safe-haven JPY on the back of solid Japanese economic data, while the AUD was sold off on the weak Australian economic outlook. CME Group data showed that AUD/JPY futures short volume rose 28% for the week, with major funds such as JPMorgan Chase reducing their AUD positions and increasing their JPY positions, reinforcing the downward pressure on the pair.

JPY trading volume in the forex market increased by 20%, especially in the AUD/JPY pair, with volume reaching $120 billion/day, the highest in 2 months. In contrast, the AUD lost strength, with the AUD's relative strength index against the G10 currency basket falling to its lowest level since October 2024. A report from Mitsubishi UFJ on 24/02/2025 predicted that AUD/JPY could fall another 2% if the RBA signals easing, but if the BoJ raises interest rates, the JPY could recover slightly, reducing the downward pressure.

Technical analysis

AUD/JPY Freefall Below 95.00: Can the Yen Recover from RBA Pressure?_1

On the AUD/JPY chart on 25/02/2025, the price dropped sharply to 94.254, below the MA50 (94.600) and MA200 (95.200). Important support is at 94.000 (January 2025 low) and resistance is at 94.600 (MA50). RSI is at 30, in the oversold zone (below 30), but has not shown any signs of recovery, indicating that the bearish pressure has not yet exhausted itself. Bollinger Bands are expanding with the price touching the lower band at 94.100, signaling high volatility. MACD is below zero, with the histogram at -0.0015, confirming the downtrend, but momentum may slow if the price meets strong support.

If price breaks 94,000, next target is 93,500; if it breaks 94,600, a test of 95,000 is possible. The current downtrend is supported by increasing trading volume and bearish crossovers of moving averages.

Trading Recommendations

Entry: 94.250

City: 94,000

SL: 94.700

Note risks from BoJ decision on 28/02/2025 and Australian employment data, manage risk at 1-2% of account to cope with volatility from energy market or geopolitics.

AUD/JPY fell sharply on 25/02/2025 due to weak Australian economy and JPY's increasing role as a safe haven. Technical trends reinforce the bearish scenario, but investors need to be cautious with the BoJ decision and upcoming economic data, and manage risks closely in volatile markets.

Risk Warnings and Disclaimers

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Adam

Forex

Economic

Summary:

On February 25, 2025, the USD/JPY market experienced strong fluctuations, rising to 150.20, a 5-month high, with an increase of 0.60% from the closing level of 149.40...

BUY USDJPY

EXP

EXPIRED

150.200

Entry Price

151.000

149.400

155.814 +0.255 +0.16%

Pips

EXPIRED

149.400

149.673

Exit Price

150.200

Entry Price

151.000

Overview

On February 25, 2025, USD/JPY traded around 150.20, marking a sharp increase due to pressure from monetary policy and outstanding US economic data. The Fed continued to keep interest rates at 5.25%-5.50%, with the US CPI in January 2025 rising to 3.2%, higher than the forecast of 3.0%, strengthening the USD. The US employment report showed the unemployment rate falling to 3.5% and wage growth at 4.1%, supporting the USD's appreciation. The DXY index rose 0.8% to 106.50, reflecting the flow of money into the USD as a safe asset.

In contrast, the BoJ maintained its ultra-loose policy with interest rates at 0.1%, the lowest in the G10, although it has risen slightly from negative levels in January 2025. Japanese economic data showed that the manufacturing PMI in February 2025 reached 50.3, higher than the forecast of 50.0, but exports fell 2.5% due to weak demand from China, reducing the attractiveness of the JPY. Geopolitical tensions in East Asia, especially the conflict in the South China Sea, increased volatility, but not enough to keep the JPY as a safe haven, as investors preferred the USD.

WTI oil prices were steady at $78.50/bbl, but Japanese gas prices rose 8% due to import dependence, creating imported inflationary pressures, further weakening the JPY. The large interest rate differential between the USD and JPY continued to fuel the uptrend in USD/JPY, with expectations that the BoJ will keep its easing policy for at least the next 6 months.

Market psychology

Market sentiment on 25/02/2025 was selectively optimistic, with the VIX at 22, but the Fear Greed Index rose to 35, reflecting a neutral-consensus sentiment. Investors turned to the USD as a safe-haven asset on strong US economic data, while the JPY lost its safe-haven status due to the lack of confidence in Japan's economic outlook. CME Group data showed that USD/JPY futures volume increased by 20% during the week, with major funds such as Citadel and Goldman Sachs increasing their USD long positions, reducing the JPY, reinforcing the upward pressure on the pair.

USD trading volume in the forex market increased by 22%, especially in the USD/JPY pair, with trading volume reaching $150 billion/day, the highest in 3 months. In contrast, the JPY was sold off sharply, with the JPY's relative strength index against the G10 currency basket falling to its lowest level since September 2024. A report from Nomura on February 24, 2025 predicted that USD/JPY could rise another 2-3% if the Fed continues its hawkish signals, but if the BoJ unexpectedly raises interest rates, the JPY could recover slightly.

Technical analysis

USD/JPY Breaks Strong Above 150.00: Can the Yen Recover from Fed Pressure?_1

On the USD/JPY chart on 25/02/2025, the price rallied to 150.20, above the MA50 (149.80) and MA200 (148.50). Important support is at 149.50 (January 2025 low) and resistance is at 150.50 (September 2024 high). RSI is at 68, in overbought territory (above 70), but there is no sign of bearish divergence, indicating that bullish pressure remains strong. Bollinger Bands are widening with the price touching the upper band at 150.30, signaling high volatility. MACD above zero, with histogram at 0.0018, confirms the uptrend, but momentum may slow if the price encounters strong resistance.

If price breaks 150.50, next target is 151.00; if it falls below 149.50, a test of 148.50 is possible. The current uptrend is supported by increasing volume and bullish crossovers of moving averages.

Trading Recommendations

Entry: 150.20

TP: 151.00

SL: 149.40

Note risks from BoJ decision on 28/02/2025 and US inflation data, manage risk at 1-2% of account to cope with fluctuations from energy market or geopolitics.

USD/JPY on February 25, 2025 increased strongly due to hawkish Fed policy and strong US economy, while JPY weakened due to BoJ easing. Technical trends reinforce the bullish scenario, but investors need to be cautious with the BoJ decision and upcoming economic data, and manage risks closely in volatile markets.

Risk Warnings and Disclaimers

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Adam

Forex

Summary:

On 25/02/2025, the EUR/AUD market witnessed a significant decline, trading around 1.6580, down 0.45% from the high of 1.6700 earlier in the week. Key factors included the Reserve Bank of Australia (RBA) tightening policy and expectations of ECB easing policy, along with weak economic data from the Eurozone....

SELL EURAUD

Close Time

CLOSED

1.65800

Entry Price

1.65000

1.66700

1.76437 +0.00319 +0.18%

53.5

Pips

Loss

1.65000

1.66335

Exit Price

1.65800

Entry Price

1.66700

Overview

On February 25, 2025, EUR/AUD traded around 1.6580, falling sharply due to pressure from mixed monetary policies and weak economic data. The RBA kept interest rates at 4.35%, the highest in 13 years, to control inflation of 3.5% in Australia, while GDP in the fourth quarter of 2024 increased by 0.7%, higher than the forecast of 0.5%, strengthening the AUD. In contrast, the Eurozone faced GDP growth of only 0.3% and the manufacturing PMI dropped to 45.7, weakening the euro. The ECB may cut interest rates from 0.50% on February 27, 2025, putting downward pressure on the pair, in the context of geopolitical tensions in Europe causing gas prices to rise, negatively affecting the Eurozone economy.

Market psychology

Market sentiment on 25/02/2025 was cautious, with the VIX at 22 and the Fear Greed Index falling to 28, reflecting concerns about the global economy. Investors turned to the AUD as a safe-haven asset on strong Australian economic data, while the EUR sold off on a weak economic outlook. CME Group data showed that EUR/AUD short positions increased by 25% over the week, with major funds such as BlackRock reducing their EUR positions and increasing their AUD positions, reinforcing the downward pressure on the pair.

Technical analysis

Will Pressure From ECB and RBA Lead to Further Downtrend?_1

On the EUR/AUD chart on 25/02/2025, the price fell to 1.6580, below the MA50 (1.6650) and MA200 (1.6700). Important support is at 1.6550 (January 2025 low) and resistance is at 1.6650 (MA50). RSI is at 32, in oversold territory, but there are no signs of recovery. Bollinger Bands are widening with price touching the lower band, indicating high volatility. MACD is below zero, but the histogram is narrowing, indicating that the bearish momentum may slow down. If the price breaks 1.6550, the next target is 1.6500; if it breaks 1.6650, a test of 1.6700 is possible.

Trading Recommendations

Entry: 1.6580

TP: 1.6500

SL: 1.6670

Note risks from ECB decision 27/02/2025 and Australian employment data, manage risk at 1-2% of account to deal with volatility from energy market or geopolitics.

EUR/AUD on 25/02/2025 is under pressure due to mixed monetary policies and weak Eurozone economy, with technical trends reinforcing the bearish scenario. However, investors need to closely monitor upcoming data to avoid unexpected fluctuations, and manage risks closely in volatile markets.

Risk Warnings and Disclaimers

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Eva Chen

Forex

Central Bank

Summary:

UK retailers are poised to implement the most significant investment cuts since 2019. Monetary Policy Committee member Dhingra from the Bank of England (BOE) has signaled concerns regarding the weakening consumer spending.

BUY GBPJPY

Close Time

CLOSED

188.615

Entry Price

195.800

186.400

208.323 +0.079 +0.04%

175.0

Pips

Profit

186.400

190.365

Exit Price

188.615

Entry Price

195.800

Fundamentals

During the European morning session on Friday, the GBPJPY climbed to approximately 189.46. The GBPJPY's strength followed the release of UK economic data.

The Confederation of British Industry (CBI) reported on Tuesday that UK retailers are planning the most significant cuts in investment in over five years, amidst weak consumer spending and rising costs.

The CBI's quarterly survey revealed that the investment intentions balance, which is the difference between the percentage of firms planning to increase investment and those planning to decrease it, fell to -56% in February. This is the lowest level since May 2019, down from -27% in November.

Martin Sartorius, the CBI's Chief Economist, stated, "The combination of persistently weak demand and the impact of the Autumn Statement has dampened retailers' sentiment, leading to the sharpest deterioration in investment intentions in nearly six years." Retailers and other businesses have voiced concerns over the Labour government's new budget, introduced on October 30 of the previous year, which included an additional GBP25 billion in employer National Insurance contributions and other cost increases. Consumer demand remains subdued, despite wage growth now outpacing inflation.

Dhingra, a member of the BOE's Monetary Policy Committee and considered among the most dovish members, has reiterated her call for a more rapid pace of interest rate cuts. She maintains that policy remains overly restrictive despite ongoing disinflation.

Dhingra, who voted for a 50-basis-point cut earlier this month, refuted the common interpretation that a "gradual easing cycle means 25 basis points per quarter," stating, "That's not actually what the committee has said. It's certainly not my definition." She emphasized that even with the assumption of 25-basis-point cuts each quarter, monetary policy would still be "restrictive throughout the year."

Her primary concern remains the persistent weakness in consumer spending, noting, "Consumption is still quite weak, so we're not seeing a resurgence of inflationary pressures." She also pointed out that the slow recovery in demand justifies a more accommodative policy stance, as "we're basically not fully recovered yet."

Despite concerns about potential inflationary pressures in certain goods, Dhingra insists that the disinflationary process is not yet complete. She argues that the key issue is that monetary policy remains restrictive, and reducing the level of restriction will not necessarily halt the downward trend in inflation.

Her remarks underscore the clear divergence within the Monetary Policy Committee. While some members advocate for maintaining a patient stance, dovish members such as Dhingra and Catherine Mann are pushing for earlier and more substantial interest rate cuts.

In contrast to the UK's need for rate cuts, Japan leans towards a rate hike. Japanese Finance Minister Katsunobu Kato stated last Friday that rising long-term interest rates could strain Japan's fiscal position. These comments exerted some selling pressure on the yen, creating a tailwind for the GBPJPY. However, better-than-expected national CPI inflation data in Japan strengthens the case for the Bank of Japan's (BOJ) hawkish monetary policy outlook, which may help limit the yen's decline.

Market's Performance Is Currently Decoupled from Fundamentals, Necessitating a Short-Term Trading Strategy_1

Technical Analysis

The intraday bias for the GBPJPY remains neutral. The risk is slightly skewed to the downside as long as the 193.04 resistance level holds. On the downside, a sustained break of 187.04 would suggest a continuation of the decline from 199.79 towards the 180.00 support level. It is recommended to buy low and sell high.