GBP/JPY Resilient, But Sell Setups Lurk Amid Choppy UK Retail Signals

The GBP/JPY gained sharply despite weak UK retail sales. It hit an intraday low of  198.13 and is currently trading around 198.96.  Intraday trend is bullish as long as support 197.40 holds.

Though falling short of the market's expected 1. 2% increase, June 2025 saw UK retail sales grow 0. 9% month-on-month, a partial recovery from May's sharp 2. 8% drop. Warm weather propelled the recovery by raising food, beverage, and fuel sales—automotive gasoline had its biggest monthly gain since May 2024—and by means of more promotional activity and a solid 1. 7% increase in internet sales. Although non-food store sales increased and total consumer activity improved, underlying problems remain: sales volumes remain 1. 6% below pre-pandemic levels, and consumer confidence is tempered by persistent inflation and continuing financial pressures.

The GBP/JPY pair is trading above  55 and 200 EMA (Short-term) and 365 EMA (long-term) on the 1-hour chart, confirming a mixed trend.  Any violation below 198.40 indicates the intraday trend is weak. A dip to 198/197.70/197.40/196.70/196.25/195.25/194/193.70 is possible.  Immediate resistance is at 199.20, a breach above this level targets 200/202/204.

Market Indicators (1-hour chart)

CCI (50)- Neutral

Directional movement index - Neutral

Trading Strategy:  Buy

 It is good to buy on dips around 198.45-50 with SL around 197.70  for a TP of 200.