• Surprisingly positive UK retail sales data provides a fresh lift to the GBP.
• Positive Brexit comments by Juncker and Coveney remains supportive.
• Focus remains on the informal EU leaders’ meeting in Salzburg.
The GBP/JPY cross finally broke out of its Asian session consolidation phase and spiked back above the 148.00 handle post-UK retail sales data.
After yesterday's volatile swing, triggered by hotter-than-expected UK CPI print and bearish Brexit headlines, the cross regained positive traction on Thursday and was further supported by stronger UK macro data.
The British Pound got a strong boost following the surprisingly positive UK monthly retail sales figures, coming in to show 0.3% m/m growth in August as against a contraction of 0.2% anticipated.
This coupled with some optimistic Brexit comments by the European Commission President Juncker and Irish Foreign Minister Simon Coveney remained supportive of the strong bid surrounding the cross.
Meanwhile, the prevalent cautious mood around equity markets did little to provide any meaningful boost to the Japanese Yen's safe-haven status, albeit might turn out to be the only factor keeping a lid on any runaway rally.
Moving ahead, the market focus will remain on fresh Brexit headlines coming out of the informal meeting between the UK PM Theresa May and EU leaders in Salzburg.
Technical levels to watch
Any subsequent up-move is likely to confront immediate resistance near the 148.50-55 region, two-month tops set overnight, above which the cross is likely to aim towards reclaiming the 149.00 handle.
On the flip side, the 147.75-70 region now seems to protect the immediate downside, which if broken might turn the cross vulnerable to head back towards challenging the 147.00 round figure mark.
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