The GBP/JPY currency pair showed a slight gain on Wednesday, trading near 191.20. This upward movement came despite a bearish technical outlook and concerns about US tariffs potentially impacting Japan's economic recovery.
The GBP/JPY currency pair advanced to approximately 191.20 in the early hours of Wednesday's European trading session. This movement comes amidst concerns surrounding US President Donald Trump's imposition of taxes on commodity imports, which could potentially hinder Japan's economic recovery . These concerns have led to a weakening of the Japanese Yen (JPY).
Japan's Finance Minister, Katsunobu Kato, stated that he would carefully evaluate the impact of these US tariffs on the Japanese economy and formulate an appropriate response. Technical indicators suggest a bearish outlook for GBP/JPY. The currency pair remains below the crucial 100-day Exponential Moving Average (EMA) on the daily chart, indicating a potential for further downward movement. The Relative Strength Index (RSI), hovering near 47.45, further supports this bearish sentiment, as it resides below the midline, suggesting a path of least resistance towards the downside. The lower boundary of the Bollinger Band at 187.70 acts as an initial support level for GBP/JPY. A decisive breach below this level could expose the 187.05-187.00 region, representing the low point reached on February 7th and a psychologically significant level. Further decline could see the cross testing the 184.37 level, which marked the low on September 13, 2024. On the upside, the key resistance level for GBP/JPY is situated near 193.50, coinciding with the 100-day EMA. Sustained trading above this level could pave the way for further gains towards 195.15, the upper boundary of the Bollinger Band. The additional upside filter to monitor is 197.41, the high reached on January 6th.
GBP/JPY Japanese Yen US Tariffs Economic Recovery Technical Analysis Bollinger Band Relative Strength Index
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