Trims gains below 188.50 amid the overbought condition – Crypto News – Crypto News
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GBP/JPY advances firmly above 162.00 as bets over BOE-BOJ policy divergence accelerates GBP/JPY advances firmly above 162.00 as bets over BOE-BOJ policy divergence accelerates

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Trims gains below 188.50 amid the overbought condition – Crypto News

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  • GBP/JPY loses its recent gains around 188.25 following the downbeat UK Retail Sales data.
  • UK Retail Sales fell 3.2% MoM in December from a 1.4% rise in November, below the market consensus
  • The cross holds above the key EMA with the overbought RSI condition.
  • The immediate resistance level will emerge at 189.00; 187.32 acts as an initial support level for EUR/JPY.

The GBP/JPY cross trades in positive territory for the fifth consecutive day during the early European session on Friday. However, the cross loses its recent gains and retreats from the intraday high of 188.93 after the release of weaker-than-expected UK Retail Sales data. The cross currently trades near 188.25, up 0.04% on the day.

The latest data from the National Statistics revealed on Friday that UK Retail Sales fell 3.2% MoM in December from a 1.4% rise in November, below the market consensus of a 0.5% drop. Retail Sales ex-fuel dropped 3.3% MoM in December from the previous reading of a 1.5% increase.

On an annual basis, UK Retail Sales came in at -2.4% YoY in December versus 0.2% prior, worse than the market expectation of a 1.1% rise. The Pound Sterling drops lower following the downbeat UK data.

From a technical perspective, GBP/JPY maintains the positive view unchanged on the four-hour chart as the cross holds above the 50- and 100-hour Exponential Moving Averages (EMAs). The 14-day Relative Strength Index (RSI) holds in bullish territory above the 50 midline. However, the overbought RSI condition indicates that further consolidation cannot be ruled out before positioning for any near-term GBP/JPY appreciation.

The psychological round mark at 189.00 acts as an immediate resistance level for the cross. Any follow-through buying above the latter will pave the way to the upper boundary of the Bollinger Band at 189.36. Further north, the next hurdle is seen near a weekly high of December 2014 at 189.72, followed by the 190.00 round figure.

On the flip side, a low of December 18 at 187.32 acts as an initial support level for EUR/JPY. The additional downside filter to watch is the 187.00 psychological mark, followed by the 50-hour EMA at 185.93. A breach of this level will see a drop to the lower limit of the Bollinger Band at 184.85. The key contention level will emerge at the 100-hour EMA at 184.65. A breach of the latter would likely resume the downtrend.

GBP/JPY four-hour chart

 

 

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