GBP/JPY trades with modest losses below 187.00 mark ahead of UK Retail Sales

GBP/JPY drifts lower for the second straight day, albeit lacks any follow-through selling.
Expectations that the BoE will start cutting rates in 2024 continue to undermine the GBP.
Traders look forward to the UK monthly Retail Sales figures for short-term opportunities.

Haresh Menghani FXStreet

The GBP/JPY cross remains under some selling pressure for the second straight day on Friday and moves further away from its highest level since November 2015, around the 188.25-188.30 area touched earlier this week. Spot prices currently trade near the 186.85-186.80 region, down just over 0.10% for the day, as traders now look to the UK Retail Sales figures for a fresh impetus.

In the meantime, softer UK consumer inflation figures released on Wednesday reaffirmed market expectations that the Bank of England (BoE) will soon start cutting rates. This is seen as a key factor behind the British Pound's relative underperformance and exerting some pressure on the GBP/JPY cross. Apart from this, a softer risk tone drives some haven flows towards the Japanese Yen (JPY) and contributes to the mildly offered tone.

That said, any meaningful appreciating move for the JPY still seems elusive in the wake of a more dovish stance adopted by the Bank of Japan (BoJ). In fact, BoJ Governor Kazuo Ueda reiterated this Friday that the central bank will patiently maintain the ultra-loose monetary policy settings as sustained achievement of the inflation target is not yet in sight. Ueda added that the trend inflation is likely to accelerate toward 2% through fiscal 2025.

This might continue to undermine the JPY and help limit the downside for the GBP/JPY cross. Meanwhile, Japan's Deputy Finance Minister Ryosei Akazawa reiterated that the government will intervene in the FX market to arrest excess volatility. This might hold back traders from placing aggressive bullish bets and cap the upside for spot prices. Nevertheless, the cross remains on track to register gains for the third successive week.

Technical levels to watch

GBP/JPY

Overview
Today last price	186.8
Today Daily Change	-0.25
Today Daily Change %	-0.13
Today daily open	187.05

Trends
Daily SMA20	184.31
Daily SMA50	183.12
Daily SMA100	183.12
Daily SMA200	175.8

Levels
Previous Daily High	188
Previous Daily Low	186.83
Previous Weekly High	185.97
Previous Weekly Low	184.55
Previous Monthly High	184.33
Previous Monthly Low	178.08
Daily Fibonacci 38.2%	187.28
Daily Fibonacci 61.8%	187.55
Daily Pivot Point S1	186.59
Daily Pivot Point S2	186.12
Daily Pivot Point S3	185.42
Daily Pivot Point R1	187.75
Daily Pivot Point R2	188.46
Daily Pivot Point R3	188.92

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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