The GBP/JPY pair recovered in the previous to trade at the latest high around 184.20 levels on an upbeat UK employment figure and the slightly hawkish Bank of England minutes.
However, the pair could not extend gains above 184.20 and fell to 183.50 levels. The next major trigger is seen from the UK retail sales due for release tomorrow. The headline figure is seen at an impressive 5.9% year-on-year in January. However, month-on-month the retail sales are seen falling 0.2% compared to the previous month’s gain of 0.4%.
Technically, the pair appears stuck around 184.20-184.30 levels. Despite an upbeat jobs data and BOE minutes released yesterday, the pair finished well below 182.50 (50% retracement of 175.49-189.70) and 184.26 (61.8% retracement). The pair is also struggling to sustain gains above the falling trend line resistance located at 183.50.
Thus, a weak retail sales print could result in the sharp fall in the GBP/JPY pair to 181.50 levels. However, a strong retail sales print along with a short-term fix to Greece’s debt problem would be enough to send the pair higher to 185 plus levels.
However, the pair could not extend gains above 184.20 and fell to 183.50 levels. The next major trigger is seen from the UK retail sales due for release tomorrow. The headline figure is seen at an impressive 5.9% year-on-year in January. However, month-on-month the retail sales are seen falling 0.2% compared to the previous month’s gain of 0.4%.
GBP to weaken on Retail Sales
The pair could drop to 181.50 levels if the UK retail sales disappoint market expectation. Moreover, a weak number would indicate slow growth in consumption despite a sharp rise in the wage growth data released yesterday. Furthermore, the GBP appears overbought after an upbeat jobs data and the hawkish Bank of England minutes. Hence, a weak retail sales data could trigger a sharp unwinding of GBP longs.Greece led uncertainty to support the Yen
The renewed concerns regarding the Greece debt could support gains in the Japanese Yen. German government rejected Greece’s proposal of loan extension due to which the shared currency was sold-off. The risk aversion would also keep the British Pound under pressure. With the German government’s refusal, we may not see a concrete deal coming through from the Eurogroup meet scheduled tomorrow. Consequently, the pair could take a hit on risk aversion.Technically, the pair appears stuck around 184.20-184.30 levels. Despite an upbeat jobs data and BOE minutes released yesterday, the pair finished well below 182.50 (50% retracement of 175.49-189.70) and 184.26 (61.8% retracement). The pair is also struggling to sustain gains above the falling trend line resistance located at 183.50.
Thus, a weak retail sales print could result in the sharp fall in the GBP/JPY pair to 181.50 levels. However, a strong retail sales print along with a short-term fix to Greece’s debt problem would be enough to send the pair higher to 185 plus levels.
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