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​​​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.

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​​​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.

EUR/GBP chart Source: IT-Finance.com
EUR/GBP chart Source: IT-Finance.com

​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.

GBP/USD chart Source: IT-Finance.com
GBP/USD chart Source: IT-Finance.com

​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.

USD/JPY chart Source: IT-Finance.com
USD/JPY chart Source: IT-Finance.com

This information has been prepared by IG, a trading name of IG Markets Ltd and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

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