GBP/JPY Under Pressure: Yen Gains as US Downgrade Spurs Safe-Haven Demand

GBP/JPY  lost its shine as demand for safe-haven assets like yen increases. It hits an intraday low of 192.92 and is currently trading around 193.17  Intraday trend is bearish as long as resistance 195 holds.

Moody's lowered the U.S. government credit rating to Aa1 from Aaa on May 16, 2025, after the nation's debt level of $36 trillion and ongoing fiscal deficits, becoming the final one of the big rating agencies to do so. The downgrade, driven by increased interest payments, entitlement expenses, and slow revenue growth, foresees federal deficits declining. The downgrade caused Treasury yields to increase, stock futures to fall, and to downgrade the credit rating of big U.S. banks, although a stable outlook is a reflection that there are no further downgrades in the near term. The move reflects heightened perceptions of risk about U.S. debt and future market volatility

The GBP/JPY pair is trading below  34 and above 55 EMA (Short-term) and  200 EMA (long term on the 4- hour chart, confirms a bearish trend.  Immediate resistance is at 194,a breach above this level targets of 194.70/195/196.50.  Downside support is at 193.50/193/192.35/191.70.

Market Indicators (4- hour)

CCI (50)- Bearish

Directional movement index - Neutral

Trading Strategy: Sell on rallies

 It Is good  to sell on rallies around 194 with SL around 195  for a TP of 191.70/190.