The GBP/JPY lost its shine after dismal UK retail sales. It hit an intraday low of 189.33 and is currently trading around 189.40. Intraday trend is bearish as long as resistance 192 holds.
Impact of Retail Sales on Consumer Behavior
The decline in UK retail sales as recorded as of January 17, 2025; the sales made in December 2024 were lower. The sales at the end of December 2024 declined 0.3 % after reaching $0.4% in sales to November.
This decline might be because of economic stressors like inflation and the rising cost of living, which make the consumer more cautious in spending money. December being the peak holiday shopping season, such a decline would mean that people are cutting down on unnecessary purchases.
Analysts will observe closely to check if this pattern continues or if the sales pick up in the forthcoming months. As the retail industry is a prominent sector of the services industry, its performance for the overall economy is important.
Technical Analysis of GBP/JPY
The GBP/JPY pair is trading below 34 and 55 EMA (Short-term) and 200 EMA (long-term) on the 4-hour chart, confirming an overall downtrend. Immediate resistance is at 190.20; a breach above this level targets of 190.60/191/191.60/192/193/193.51/194.52/195/195.60/196.25/197. Downside support is at 189.40 with additional levels at 188.70/188.
Market Indicators
CCI (50)- Bearish
Directional movement index - Bearish
It is recommended to sell on rallies around 190.20 with a stop-loss at 191 for a TP of 188.
