GBP/JPY: Bulls keep 152.00 on radar ahead of UK Retail Sales, PMI
|- GBP/JPY keeps bounce off four-month low for the third consecutive day.
- Market sentiment dwindles amid a quiet day, off in Japan and mixed clues.
- UK’s covid-led death toll gradually firms up, scientists warn return of lockdown in three weeks.
- EU President Ursula von der Leyeyn rejects UK PM Johnson’s push to renegotiate NI protocol.
GBP/JPY edges higher around 151.65, up 0.05% intraday, amid the initial Asian session on Friday. In doing so, the cross-currency pair prints a three-day uptrend following its bounce off March lows.
An off in Japan and cautious sentiment ahead of the UK’s preliminary readings for July PMIs probe the pair buyers of late. However, the yen’s weakness and the Bank of England’s (BOE) comparatively stronger position than the Bank of Japan (BOJ) keeps the GBP/JPY bulls hopeful.
Even so, the UK’s jump in virus-led deaths, latest to 83, keeps warning the optimists. Also on the negative side were warning from British scientists concerning the return of the lockdown in three weeks and shortage of health workers. On the other hand, Tokyo’s covid tally also keeps refreshing the six-month high.
Elsewhere, European Commission President Ursula von der Leyen turned down UK PM Boris Johnson’s other push to alter Northern Ireland (NI) protocol. The bloc representative tweeted, “Boris Johnson called to present the UK Command paper on the Irish/Northern Irish Protocol. The EU will continue to be creative and flexible within the Protocol framework. But we will not renegotiate.”
It should be noted that the UK's consumer confidence jumped back to the pre pandemic levels, per GfK, and offers extra positives to the UK currency (GBP).
On a broader front, the fears of covid resurgence reversing the recovery from the pandemic’s initial rounds weigh on the sentiment. However, optimism over US President Joe Biden’s infrastructure spending plan and US debt limit keeps buyers hopeful.
Amid these plays, S&P 500 Futures remain sluggish following a mildly bid Wall Street closing.
Given the off in Japan, GBP/JPY traders may witness a lackluster Asian session but the UK's Retail Sales for June and preliminary data for the PMIs for July will be watched closely for immediate direction. Although the UK’s figures may not be severe to reverse the pair’s latest recovery, positives will be taken with a pinch of salt. Forecasts suggest YoY Retail Sales to ease, with monthly recovery, whereas PMIs may print a softer figure to challenge the pair's further upside.
Technical analysis
GBP/JPY pair’s rebound from 148.50 is on the way to confront the 152.50-55 strong resistance confluence, comprising 100-DMA and one-month-old falling trend line.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.