GBP/JPY sliding as Trump targets China with tariffs
- Trump to impose tariffs on China.
- GBP/JPY tests 148.00 to the downside.
The GBP/JPY is currently trading at around 148.09 as the pair is probing the 148.00 handle, the 200-period SMA and the low of Tuesday.
The Yen is gaining strength as the Nikkei is down 0.87% , gaining after Trump announced that he wants to impose tariffs on China and that he is contemplating the idea of a trade package which would consist of investment restrictions, indefinite tariffs and visa restrictions for Chinese travelers.
On the other side of the story, the British Pound is under pressure as the UK is expulsing 23 Russian diplomats linked with the murder of an ex Russian spy on British soil. Theresa May said that the diplomats were undeclared intelligence agents. She said: The expulsion of diplomats will "fundamentally degrade Russian intelligence capability in the UK for years to come”. She also plans on freezing some Russian state assets. The negative news comes after the pound has seen renewed enthusiasm form the spring statement from Hammond on Tuesday where he was upbeat on growth and saw the 2% BoE inflation target reached within a year.
GBP/JPY daily chart
The Guppy has found resistance at the 148.00 handle and 100-period SMA on the 4-hour chart. At this point, the pair seems vulnerable to further downside if the 148.00 level is unable to hold the price as the market formed an ABCD pattern. The next support is seen in the 146.70 region which is the 61.8% Fibonacci retracement from the March 3-13 move up. Resistance is now seen at 148.40, 23.6% Fibonacci retracement level, followed by 149.40 a cyclical high.