The GBP/JPY pared some of its gains on the strong yen. It hits a high of 189.46 yesterday and is currently trading around 187.85. Intraday trend is bearish as long as resistance 190 holds.
Global Uncertainty Fuels Safe-Haven Yen
Additional speculations for BoJ rate reductions, caused by growing economic uncertainties as well as the increased tensions in trade relations, have enabled increased safe-haven inflows toward the Japanese Yen (JPY). Despite the BoJ maintaining its benchmark short-term rate at 0.5% since January 2025, worldwide recession concerns, stoked by U.S. trade policy, have left Japan's export-oriented economy vulnerable, leading to JPY demand as a safe-haven currency. This is also supported by expectations that the U.S. Federal Reserve could also resort to rate cuts, lowering the interest rate differential between Japan and the US, favoring JPY
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 188.50 ,a breach above this level targets of 189/189.50/190/191/191.75/192.30/193. Downside support is at 188 with additional levels a 187.25/186/185.
Market Indicators
CCI (50)- Bearish
Directional movement index - Bearish
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.
