GBP/JPY looks ready to extend a months-long downtrend!
How low can Guppy go before the bulls step in?
We’re taking a closer look at the pair’s daily chart patterns!
GBP/JPY Daily Forex Chart by TradingView
The British pound has taken a hit in recent sessions as rising tensions between Russia and Ukraine spooked investors in the region. At the same time, escalating U.S.-China trade tensions are fueling global growth worries and capping GBP demand, even though the U.K. has relatively less exposure to steep U.S. tariffs.
On the flip side, a weakening U.S. dollar is boosting the Japanese yen’s appeal as a safe haven, while hawkish expectations for the Bank of Japan are giving the yen even more support.
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the British pound and the Japanese yen, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
GBP/JPY, which has been in a downtrend since late 2024, recently turned lower from the 196.00 psychological level near the R1 Pivot Point at 196.69.
Bearish candlesticks and downside momentum could drag GBP/JPY below the 100 and 200 SMAs, opening the door for a move toward the midpoint of the descending channel near the S1 Pivot Point at 190.53 and the 190.00 psychological level.
On the other hand, if “TACO trades” gain momentum and risk sentiment shifts in favor of the bulls, GBP/JPY could retest the 196.00 highs and possibly break above the descending channel resistance.
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment!
Disclaimer:
Please be aware that the technical analysis content provided herein is for informational and educational purposes only. It should not be construed as trading advice or a suggestion of any specific directional bias. Technical analysis is just one aspect of a comprehensive trading strategy. The technical setups discussed are intended to highlight potential areas of interest that other traders may be observing. Ultimately, all trading decisions, risk management strategies, and their resulting outcomes are the sole responsibility of each individual trader. Please trade responsibly.
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