GBP/JPY retreats from 1-month tops, focus remains on BoE

Haresh Menghani FXStreet

• Mixed UK retail sales data prompts some GBP weakness.
• Reviving safe-haven demand adds to the downward pressure.
• Focus remains on the latest BoE monetary policy update.

The GBP/JPY cross snapped three consecutive days of winning streak and eroded a major part of previous session's up-move to one-month tops.

Despite better-than-expected headline UK retail sales data, showing m-o-m growth of 0.8%, the core figures pointed to a further slowdown in spending and prompted some GBP weakness on Thursday.

This coupled with the prevalent risk-off mood underpinned the Japanese Yen's safe-haven demand and collaborated to the pair's weaker tone through the mid-European session.

The downside, however, remained cushioned as investors seemed reluctant to place any aggressive bets and preferred to wait on the sideline ahead of the latest BoE monetary policy update.

With a Brexit transition deal already in place, the accompanying rate statement could point to a hawkish tilt and trigger a fresh leg of bullish momentum around the British Pound. Hence, any further downside seems to be limited and any dip is more likely to be quickly bought into.

Technical levels to watch

Immediate support is pegged near the 149.00-148.80 region, below which the fall could get extended towards retesting the very important 200-day SMA support near the 148.00 handle.

On the upside, the key 150.00 psychological mark seems to act as an immediate resistance, which if cleared decisively now seems to assist the cross to aim towards reclaiming the 151.00 round figure mark.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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