GBP/JPY Stalls Near 191.00: Neutral Signals Clash as Trade Tensions Loom

The GBP/JPY pair is treading water near 191.00, barely budging after Monday’s European session on May 5, 2025. Caught in a tight range, the pair reflects a market paralyzed by indecision, with mixed technical signals and global trade uncertainties clouding the outlook. As the UK and Japan navigate shifting economic currents, the pair’s next move hinges on breaking key levels. Here’s why GBP/JPY is stuck, what’s driving the stalemate, and where it’s headed.

Technical Tug-of-War Fuels Stagnation

The GBP/JPY’s flat performance masks a battle between short- and long-term signals. The Relative Strength Index, hovering at 52, signals no clear momentum, while the Moving Average Convergence Divergence flashes a faint buy signal, offset by a bearish Momentum indicator. The Awesome Oscillator and Ichimoku Base Line remain neutral, reinforcing the lack of direction. The 20-day Simple Moving Average, below the current price, hints at short-term bullishness, but the downward-sloping 100-day and 200-day SMAs above 191.00 cap any upside, keeping the pair trapped.

Trade Uncertainty Weighs on Sentiment

Global trade tensions, particularly US-China tariff disputes, are spilling over into GBP/JPY dynamics. Thin holiday trading in the UK and Asia has amplified volatility, with markets wary of inconsistent trade deal signals. Japan’s yen, often a safe-haven, faces pressure from a robust US economy, while the pound grapples with post-Brexit trade complexities. This uncertainty has left investors hesitant, contributing to the pair’s listless trading near 191.00 and stifling any breakout attempts.

Key Levels to Watch

Support lies just below at 190.50, with further floors at 190.00 and 189.50. Resistance looms at 191.50, aligning with recent highs, and a break could target 192.00. The pair’s neutral stance suggests a breakout requires a catalyst—either a shift in trade sentiment or fresh UK or Japanese data. Upcoming UK PMI and Japan’s wage growth figures will be critical, as will the Federal Reserve’s May 6-7 rate decision, which could sway the Dollar and, indirectly, GBP/JPY.

What’s Next for GBP/JPY

The GBP/JPY’s standstill reflects a market awaiting direction. A push above 191.50 could signal bullish momentum, but the 100-day and 200-day SMAs pose formidable barriers. Conversely, a drop below 190.50 might test deeper supports. With trade talks faltering and economic data on the horizon, volatility looms. For now, the pair’s inertia is a trader’s trap—patience is key until a spark ignites the next move.