The GBP/JPY lost its shine due to the trade war. It hit a low of 187.05 and is currently trading around 187.82. Intraday trend is bearish as long as resistance 190 holds.
President Trump's Tariff Announcement
President Trump has recently announced a 25% tariff on all steel and aluminum imports, starting on March 4, affecting all countries without exceptions. He claims these tariffs are meant to protect U.S. manufacturing, which he believes is under attack from both friends and foes. However, these tariffs may lead to retaliatory actions from other countries, including U.S. allies, which could escalate trade disputes. In the first term of his presidency, Trump also imposed tariffs on steel and aluminum but later had to exempt some of the allies like Canada and Mexico. He has further imposed tariffs on his imports from Canada, Mexico, and China, citing emergencies relating to unlawful immigration and drugs. Overall, these actions could be very impact in various aspects of international trade relations.
Markets eye BOE Bailey's speech today for further direction.
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 a bearish trend. Immediate resistance is at 189.20; a breach above this level targets of 189.70/190/191/191.78/192.21/193/193.36/194/195/195.60/196.25/197. Downside support is at 188.30 with additional levels at 187.65/186.78.
Market Indicators
CCI (50)- bearish
Directional movement index - bearish
It is recommended to sell on rallies around 189.35-40 with a stop-loss at 190.10 for a TP of 187.65/185.
