Navigating the Storm: Analyzing GBP/JPY Movements Amid Economic Turbulence

The GBP/JPY lost more than 500 pips in the past 10 days due to weak Pound sterling. It hit a low of 187.05 and is currently trading around 188.43. Intraday trend is bearish as long as resistance 190 holds.

Impact of U.S. Tariffs on Economic Climate

The 25% tariff on all imported steel and aluminum was announced by Trump, while the official statement is due Monday. He promised to roll out reciprocal tariffs in the next week, most likely on Tuesday or Wednesday after other countries announced the equivalent rate. This new change would supposedly safeguard America's steel and aluminum industries. Almost immediately, these new tariffs will come into force.

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.