GBP/JPY Extends Short-Term Downtrend as Selling Pressure Intensifies
Market Overview
The Japanese yen continues to strengthen against the British pound, benefiting from its safe-haven appeal as trade tensions escalate. Increasing speculation over potential US trade tariffs on the UK and the European Union has heightened uncertainty, prompting investors to seek refuge in low-yielding, risk-averse assets such as the yen.
Despite the UK’s better-than-expected PMI data for January, the pound remains under selling pressure, weighed down by broader macroeconomic concerns and deteriorating risk sentiment. Investors are now focused on key geopolitical and economic events, which could determine the near-term trajectory of GBP/JPY.
Technical Analysis
On the 1-hour chart, GBP/JPY remains firmly within a short-term downtrend, with sellers maintaining control as the pair approaches critical support at 190.601, the last recorded swing low.
A clear break below this level would reinforce the bearish outlook, opening the door for further downside targets at 190.337, 190.002, and 189.632. Technical indicators confirm the increasing selling pressure:
Bollinger Bands are trending downward, signaling strong bearish momentum.
RSI is in the oversold region, reflecting persistent selling pressure.
MACD remains firmly in negative territory, suggesting that downside momentum is accelerating.
The 100-period moving average is diverging lower, reinforcing the prevailing downtrend.
However, if buyers regain control, they must reclaim the 191.570 resistance level to challenge the upper boundary of the bearish structure. A break above this level would invalidate the current bearish scenario, potentially signaling a shift in momentum.
Key Technical Levels
- Resistance Levels: 191.570
- Support Levels: 190.601, 190.337, 190.002, 189.632
Upcoming Key Economic Events
Japan’s 10-Year Bond Auction (Tuesday) – Strong demand for Japanese government bonds could further strengthen the yen, reinforcing the bearish bias in GBP/JPY.
UK Trade Policy Developments – Any official confirmation of US trade tariffs on the UK could trigger additional pound weakness.
US Economic Data and Federal Reserve Outlook – Investors are also monitoring US economic reports, which could influence risk sentiment and FX flows.
Conclusion
GBP/JPY remains under selling pressure, with technical indicators reinforcing a bearish outlook. A break below 190.601 could trigger further declines, while a recovery above 191.570 is required to invalidate the downtrend.
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