GBP/JPY tests Tuesday’s high and retreats on UK data

By FXStreet FXStreet (Mumbai) – The cross in the GBP/JPY saw wilds swings on both sides following the release of awful UK retail sales data, which contracted more than estimates in December.

GBP/JPY back below 169 handle

The GBP/JPY cross rose sharply to 169.09 daily highs, quickly reversing a knee-jerk downward spike to 168.25, as pound remained little affected by the disappointing retail trade data. Sales including fuel plunged 1% in December against expectations of a slight 0.3% drop. At time of writing, GBP/USD retreats further to 168.88, recording a 0.90% gain on the day.

While the cross remains supported also on the back of the ongoing weakness in the yen against the US dollar, after markets increasingly speculated BOJ to ease further next week. Meanwhile, markets continue to digest the poor UK data amid a favourable risk sentiment as the black gold extends its recovery above $ 30 mark.

GBP/JPY Technical Levels

To the upside, the next resistance lies at 169.11 (Jan 19 High), above which it could extend gains to 170.97 (20-DMA). To the downside, the cross finds immediate support at 167.97/86 (10-DMA/ 1h 10-SMA), below that 167 (psychological levels), could act as a major support.
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Source:: FX Street