The GBP/JPY hits a multi month low on strong yen. It hits a low of 186.01 and is currently trading around 188.41. Intraday trend is bearish as long as resistance 190.50 holds.
Safe-Haven Demand: Yen Rallies Amidst Economic Uncertainty
The recent spike in the Japanese yen is largely attributed to its safe-haven status due to increased trade tensions and increasing economic uncertainty in the wake of U.S. President Donald Trump's tariff announcements. With investors fleeing the threat of a world trade war as well as increasing threats of a U.S. recession, the Swiss franc and yen were default safe havens making bets on the stampede away from riskier assets.
Dollar Weakness Boosts Yen's Ascent
Behind the surge in the yen is the declining U.S. dollar on falling Treasury yields and expectations for upcoming Federal Reserve rate reductions. To this purpose, expectations of upcoming Bank of Japan interest rate increases and elevated inflation expectations have fueled supports for yen appreciation even as Japanese economic growth deteriorates.
Technicals Favor Further Downside
The GBP/JPY pair is trading below 34 and 55 EMA (Short-term) and 200 EMA (long term on the 4-hour chart, confirms a bearish trend. Immediate resistance is at 190.50 ,a breach above this level targets of 191/191.75/192.30/193. Downside support is at 188 with additional levels a 187.25/186/185.
Market Indicators
CCI (50)- Bearish
Directional movement index - Neutral
Trading Strategy: Sell on Rallies
It Is good to sell on rallies around 189 with SL around 190.30 for a TP of 186.05.
