Pound Under Pressure: GBP/JPY Struggles as Tariff Fears Roil Markets

The GBP/JPY  pair lost its shine as pound sterling hit 9 months low. It hit an intraday low of 193.75 and currently trading around 193.99.The potential Reversal Zone (PRZ) is set at 200.20.

Trump's Tariff Threats Create Market Turbulence

Donald Trump's latest statements regarding possible tariffs are causing the largest upset in the financial markets with the largest impact being put on the Pound Sterling. In this case, he is taking a presidential declaration of national economic emergency to slam universal tariffs, starting at 10%, upon all imports entering into the United States using the International Economic Emergency Powers Act. Global auto suppliers, including Bosch and Continental, are already rethinking their production strategies and may shift closer to the U.S. to avoid high tariffs on imported parts. Analysts say these tariffs could push up costs for consumers and businesses, which could lead to higher inflation in the U.S. economy. This uncertainty can also cause problems for countries that are highly export-dependent on the U.S., such as the UK and China. In general, Trump's tariff plans are causing huge market shifts and raising a lot of concern about future trade and economic stability.

Technical Analysis of GBP/JPY

The GBP/JPY pair is trading above 34 and 55 EMA (Short-term) and 200 EMA (long-term) on the 4-hour chart, confirming an overall downtrend. Immediate resistance is at 195; a breach above this level could lead to targets of 195.60/196.25/197. Downside support is at 193.45 with additional levels at 192.50/191.66/190.

Market Indicators

CCI (50)- Bearish

Directional movement index - Bearish

 It is recommended to sell on rallies around 194.58-60 with a stop-loss at 195.50 for a TP of 190.10.