GBP/JPY rally stalls at 261.8% Fib extension

Omkar Godbole FXStreet Contributor

GBP/JPY trades flat lined around 150.75 levels in Asia after failing for three straight sessions to hold above 150.88, which is the 261.8% Fib extension of the move from Aug 24 low-Sep 1 high-Sep 5 low.

Focus on UK retail sales

UK Consumer spending as represented by the official retail sales data is seen rising 0.2%m/m and 1.4% y/y in August. The core retail sales, which exclude fuel, are seen rising 0.2% m/m and 1.4% y/y.

The UK-Japan 10-year yield spread could widen further on the back of a better-than-expected UK retail sales figure. The spread currently stands at 129.4 basis points.

On the other hand, weak data would add credence to the bullish exhaustion shown by the long upper shadows of the last three daily candles and shall open doors for a pull back to sub-150.00 levels.

GBP/JPY Technical Levels

An intraday break above 150.00 could see the pair re-test of 151.59 [previous day's high]. A daily close above the same would open doors for 153.63 [Apr 2016 low]. On the other hand, a breakdown of support at 150.13 [Sep 19 low on 1-hour chart] would expose 149.62 [1-hour 100-MA], under which a major support is seen at 148.89 [weekly 100-MA].

Author

Omkar Godbole

FXStreet Contributor

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

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