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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Please ensure you fully understand the risks involved. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Please ensure you fully understand the risks involved.

​​​GBP/USD rises on strong UK retail sales and USD/JPY drops amid falling Japanese inflation

​​Outlook on GBP/USD and USD/JPY amid lower volatility as the festive season approaches.

USD/JPY Source: Bloomberg

​​​GBP/USD rises on stronger-than-expected UK retail sales

​Stronger-than-expected UK retail sales helped GBP/USD rise towards the $1.2733 November high despite the final reading of quarter three (Q3) showing that the UK economy is on the brink of recession. It follows no growth in October (revised from a fall of 0.3%) and a final reading of Q3 which shows that the UK economy shrank by 0.1% from the previous quarter.

​Support can be seen along the November-to-December uptrend line and at Thursday’s low at $1.2613 to $1.2596.

​Resistance above the November high at $1.2733 sits at the current December high at $1.2794. If overcome, the 10 August high at $1.2819 would be eyed next.

​​​GBP/USD chart Source:
​​​GBP/USD chart Source:

​USD/JPY drops towards five-month December low

USD/JPY's’s descent has taken it back below the 200-day simple moving average (SMA) at ¥142.72 as the Japanese inflation rate falls to a 16-month low.

​The 7 December low at ¥141.63 represents the first downside target ahead of last week’s ¥140.95 five month low.

​Resistance above the 200-day SMA at ¥142.72 can be seen at Wednesday’s ¥143.27 low.

USD/JPY chart Source:
USD/JPY chart Source:

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