GBP/JPY has posted a decline of more than 3% over the last four trading sessions, with bearish momentum growing as the market increasingly favors the Japanese yen in the short term. Demand for the yen has risen sharply since last week, when Donald Trump announced a minimum 10% tariff on all imports into the United States. This was further reinforced today by new comments proposing additional 50% tariffs on China, following Beijing’s announcement of countermeasures against the U.S.
The yen is historically considered one of the safest currencies, and the recent surge in uncertainty has helped it hold strong against the British pound.
Wide Sideways Range
The pair remains within a broad long-term range, bounded by a ceiling near 198.676 and a floor around 186.932. Although recent selling has brought the pair close to the lower boundary, price action has not yet been strong enough to break this level, keeping the sideways channel as the dominant technical formation to watch for now.
MACD
The MACD indicator has started to show a shift in market momentum, with the histogram oscillating below the zero line. This reflects ongoing bearish pressure based on recent moving average behavior, and as long as this pattern persists, selling momentum in GBP/JPY may become increasingly relevant in the coming sessions.
RSI
The RSI also reflects a bearish tone, with the line currently holding below the 50 level. However, the indicator is gradually approaching the oversold zone near the 30 level, which is typically where selling pressure may begin to ease, potentially opening the door for short-term bullish corrections.
Key Levels:
- 192.493 – Key resistance: Located in the middle of the broader range and roughly aligned with the 200-period moving average. Persistent price action near this level may signal the beginning of a bullish bias in the short term.
- 190.144 – Tentative zone: This level may act as a potential area for short-term bullish corrections.
- 186.932 – Current support: Positioned at the bottom of the broader range. If price action breaks below this level, it could pave the way for a much more significant downtrend in the sessions ahead.
By Julian Pineda, CFA – Market Analyst