GBP/JPY retreats sharply from 1-month tops, back below 144.00 mark post-UK retail sales
- GBP/JPY failed to capitalize on the early uptick to one-month tops.
- Dismal UK retail sales prompted some fresh selling around the GBP.
The GBP/JPY cross tumbled around 90 pips and slipped back below the 144.00 round-figure mark in reaction to awful UK monthly retail sales figures.
The British pound weakened across the board after the headline UK sales missed consensus estimates by a wide margin and fell 0.6% in December. Adding to this, the previous month's already weaker reading was further revised lower to show a decline of 0.8% as against a drop of 0.6% reported previously.
GBP weighed down by BoE rate cut speculations
This comes on the back of persistent Brexit uncertainties and the recent disappointing UK macro data – including this week's weaker monthly GDP print and softer consumer inflation figures. The data further strengthened the case for a 25bps rate cut by the Bank of England at its upcoming meeting on 30 January.
The GBP price dynamics turned out to be an exclusive driver of the pair's sharp pullback from one-month tops, around mid-144.00s. Bulls seemed rather unimpressed by an offered tone surrounding the safe-haven Japanese yen, which remained on the defensive amid the latest optimism over the US-China phase one trade deal.
With Friday's important UK macro data out of the way, it will now be interesting to see if the cross is able to attract any buying interest at lower levels or the current pullback marks the end of the recent positive momentum from sub-141.00 levels touched earlier this January.
Technical levels to watch