GBP/JPY grapples with 140.00 handle, eyes UK retail sales data
|The overnight drop in the Japanese Yen pushed the GBP/JPY pair to a high of 140.34 before it trimmed gains to trade around 140.00 handle.
Focus on UK retail sales
The post Brexit boom in the UK economy is running out of steam, largely due to the sharp rise in the inflation. The UK inflation expectations currently hover at three-year high.
A survey data from Visa and the British Retail Consortium (BRC) data released earlier this month showed the Brits are feeling the inflation pinch.
The UK retail sales due today might just confirm what we already know i.e. the drop in spending due to high inflation. The retail sales are expected to have dropped 0.2% in March. Core number is seen contracting as well. A weaker-than-expected data would pour cold water over the possibility of the pair extending the rally well beyond 140.00 levels.
GBP/JPY Technical Levels
The spot was last seen trading around 139.90. A break above 140.00 would open doors for 140.60 (Mar 15 high). For a more sustained rally to 142.04 (Feb 22 high), what is required is a daily close well above 140.00 levels. On the lower side, breach of support at 139.40 (Mar 28 high) would expose 138.93 (previous day’s low). A daily close below the same could yield a sell-off to 137.75 (Mar 22 low).
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