GBPJPY continues to trend lower on its short-term time frames. Price is testing the resistance at 149.00 and could be ready for a drop to the channel support at 147.50.
The 100 SMA is below the longer-term 200 SMA so the path of least resistance is to the downside. In other words, the selloff is more likely to resume than to reverse. The 200 SMA also lines up with the channel resistance, adding to its strength as a ceiling.
Stochastic is pointing down to indicate that sellers are in control of price action, but buying pressure could still return once the oscillator hits oversold levels and turns back up.
UK retail sales turned out stronger than expected with a 0.3% gain versus the estimated 0.1% uptick. Prior to this, the claimant count change report and average earnings index also beat expectations. CPI data, on the other hand, fell short of consensus.
Brexit issues and uncertainties in PM May’s government are also keeping a lid on pound gains at the moment. So far, May has been able to defend the plans to leave the EU in the debates this week. However, the discussions are set to carry on for the next weeks and any major changes could pose more uncertainties for businesses.
As for the yen, Japanese data hasn’t been all that impressive either. The economy grew 0.3% in Q3 versus the projected 0.4% expansion while the price index came in line with expectations of a meager 0.1% uptick.