EUR/GBP stabilises, GBP/USD drops on UK retail sales while USD/JPY tops out
Outlook on EUR/GBP, GBP/USD and USD/JPY as UK retail sales come in much weaker-than-expected and Japan inflation remains at 42-year high.
EUR/GBP stabilises above support
After five consecutive days of declines, EUR/GBP seems to be on track to stabilise above its £0.8522 to £0.8504 June and July lows as UK retail sales dropped by 1.2% month-on-month (MoM) in July, worse than an expected 0.5% drop.
Thursday’s high at £0.8557 has so far been revisited, a rise above which would open the way for the 55-day simple moving average (SMA) at £0.8586 to be back in the picture.
GBP/USD slips as retail sales disappoint
GBP/USD is seen coming off Thursday’s $1.2787 high as UK retail sales came in at a much weaker-than-expected -1.2% in July versus a downwardly revised 0.6% in June. The first contraction in retail sales since March was due to rainy weather and cost pressures.
Further sideways trading below the 55-day SMA at $1.276 thus seems to be in store for the last day of the week. Only a rise and daily chart close above last week’s $1.2819 high would technically indicate that a bullish reversal is in the offing. Good support remains to be seen between the early and mid-August lows at $1.2621 to $1.2617.
USD/JPY comes off its nine-month high as inflation back up at 42-year high
After eight consecutive days of gains, USD/JPY is going through a minor retracement from this week’s ¥146.56 high as Japanese inflation hits a 42-year high. Japan’s inflation rate remained unchanged at 3.3% in July 2023 but was notably higher than market forecasts of 2.5%, helping the Yen to appreciate.
A slip back to the June peak at ¥145.07 is thus at hand. Around it the currency pair is likely to stabilise on Friday, though. Further minor potential support can be found at the early August ¥143.89 high. Resistance sits at Thursday’s ¥146.56 peak.
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