GBP/JPY: Safe-Haven Yen Sinks Sterling - Sell the Rallies?

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.