- The GBP/JPY pair has bounced towards 186.50 following the decline in UK retail sales.
- Investor sentiment recovers heading into Friday’s close, dragging sterling down again.
- UK data still fails to signal, so downside risks to the Pound remain.
The GBP/JPY pair plunged below 185.50 in trading on Friday after UK retail sales missed market forecasts, leading to a fall in the British Pound (GBP), but a mid-day recovery. Risk appetite in the broader market is seeing GBP/JPY recoup some of the day’s losses as safe havens like the Yen (JPY) are pushed lower again.
Retail sales miss estimates, Japan machinery orders rebound
UK retail sales fell 0.3% month-on-month in October, completely missing the market forecast for a 0.3% rise, despite a recovery from -1.1% in September, which was also revised down from the -0.9%.
Annualized retail sales also worsened, with a year-on-year rate in October of -2.7%, significantly worse than the -1.5% expected by the market and accelerating the decline from -1.0% in September.
An improvement in Japanese machinery orders was also seen early Friday, with a 1.4% month-on-month improvement for September, above the 0.9% expected by the market and surpassing the previous month’s 0.5% decline.
Japan’s Merchandise Trade Balance total in October also beat expectations, but still posted a sharp decline from September’s 72.1 billion yen, falling to 662.5 billion yen instead of the average forecast of 735.7 billion. of yen.
GBP/JPY Technical Outlook
With Friday’s decline, the GBP/JPY pair faces the 200 hourly moving average (SMA) for the first time in three weeks, as bids plummet back into the mid-range, and the near-term expectation for The pair could be threatening a downward tilt as intraday swing lows steepen.
Daily candlesticks show GBP/JPY remains firmly entrenched in bullish territory, but pushes to the higher side have been limited as the 2023 rally appears to be running out of gas. Congestion around familiar price levels has been increasing and the pair spent most of September and October stuck below the 50-day SMA.
GBP/JPY Hourly Chart
GBP/JPY Daily Chart
GBP/JPY Technical Levels
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
