Bullish Gartley Emerges Amidst Tariff Turmoil: GBP/JPY Technical Insights

Harmonic pattern- Bullish Gartley

Potential Reversal Zone (PRZ)-  189.30

The GBP/JPY declined sharply on board-based Pound weakness. It hit an intraday low of 190.58 and is currently trading around 191.15. Intraday trend is bullish as long as support 189.30 holds.

President Trump recently introduced new tariffs, and this has resulted in US dollar pressure and increased market volatility. Recently, on 1 February 2025, he imposed 25% tariffs on imports from Canada and Mexico and 10% tariffs on all imports coming from China. The reasons attributed to these tariffs were that illegal immigrants and drugs were perceived as national security threats.

After this news, the U.S. dollar increased as investors looked for safe investments in uncertain times. Canada and Mexico also plan to retaliate with their tariffs, and the fears of a trade war escalation are growing. Such changes may increase prices for consumers and disrupt trade. Although the dollar may perform well now, experts warn that long-term effects may harm the U.S. economy.

Technical Analysis of GBP/JPY

The GBP/JPY pair is trading below 34 and 55 EMA (Short-term) and 200 EMA (long-term) on the 4-hour chart, confirming an overall bearish trend. Immediate resistance is at 191.70; a breach above this level targets of 192/193/193.36/194/195/195.60/196.25/197. Downside support is at 191 with additional levels at 190/189.30/188.70/188.

Market Indicators

CCI (50)- Bearish

Directional movement index - Bearish

 It is recommended to buy on dips around 191.18-20 with a stop-loss at 189.30 for a TP of 195.