GBP/JPY: On the back foot ahead of UK retail sales release

BOE August rate hike odds drop, Sterling takes a hit.
Risk aversion put a bid under the Japanese Yen.
GBP/JPY could revisit lows seen in March if UK retail sales print below estimates.

Omkar Godbole FXStreet Contributor

The GBP/JPY pair fell to 145.95 on Wednesday - the lowest level since March 5 as the risk aversion in the equities put a bid under the Japanese Yen.

Meanwhile, GBP ran into offers after the official data showed the UK inflation fell unexpectedly in April. As of writing, the GBP/JPY pair is trading at 146.30.

The UK data, scheduled for release at 08:30 GMT, is expected to show consumption as represented by retail sales rose 0.7 percent month-on-month in April, following a 1.2 percent drop in March. Core retail sales are seen rising 0.4 percent month-on-month in April vs 0.5 percent drop in March.

An above-forecast reading could offer relief to battered sterling bulls. Meanwhile, a weaker-than-expected data would embolden calls of further delay in the BOE rate hike. As of now, the investors are pricing-in a one-in-three chance of the BoE rate hike in August - down from 50/50 earlier this week.

GBP/JPY Technical Levels

The support is seen at 145.95 (previous day's low) and 144.99 (March 2 low), and resistance is lined up at 147.06 (May 4 low) and 148.06 (5-day moving average).

	TREND INDEX	OB/OS INDEX	VOLATILY INDEX
15M	Strongly Bearish	Neutral	Low
1H	Bearish	Neutral	Low
4H	Bearish	Oversold	High
1D	Bearish	Neutral	Shrinking
1W	Strongly Bearish	Neutral	Shrinking
Updated May 24, 04:30 GMT

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

EUR/USD trims gains, reclaims 1.1600 and beyond

Following an earlier drop to yearly lows around 1.1530, EUR/USD now manages to recoup part of the ground lost and reclaim the area above 1.1600 the figure in the latter part of the NA session on Tuesday. Meanwhile, the pair’s marked retracement comes in response to the unabate march norht in the US Dollar, always propped up by the intense flight-to-safety environment amid the deteriorating geopolitical landscape in the Middle East.

GBP/USD attacks 1.3300, refreshing three-month lows

GBP/USD is deep in the red near 1.3300, accelerating its downside to renew three-month lows in European trading on Tuesday. The ongoing escalation in the Iran war, combined with rising Oil prices, weighs negatively on the higher-yielding Pound Sterling as the US Dollar capitalizes on increased haven demand.

Gold bounces off lows, back above $5,100

Gold remains on the defensive, eroding part of the recent multi-day advance and managing to trade back above the $5,100 mark per troy ounce on Tuesday. The precious metal initially dropped just below the critical $5,000 threshold on the back of the persistent strength of the Greenback, higher US Treasury yields across the curve and investors' repricing of Fed rate cuts.