GBP/USD rises on strong UK retail sales and USD/JPY drops amid falling Japanese inflation
Outlook on GBP/USD and USD/JPY amid lower volatility as the festive season approaches.
GBP/USD rises on stronger-than-expected UK retail sales
Stronger-than-expected UK retail sales helped GBP/USD rise towards the $1.2733 November high despite the final reading of quarter three (Q3) showing that the UK economy is on the brink of recession. It follows no growth in October (revised from a fall of 0.3%) and a final reading of Q3 which shows that the UK economy shrank by 0.1% from the previous quarter.
Support can be seen along the November-to-December uptrend line and at Thursday’s low at $1.2613 to $1.2596.
Resistance above the November high at $1.2733 sits at the current December high at $1.2794. If overcome, the 10 August high at $1.2819 would be eyed next.
USD/JPY drops towards five-month December low
USD/JPY's’s descent has taken it back below the 200-day simple moving average (SMA) at ¥142.72 as the Japanese inflation rate falls to a 16-month low.
The 7 December low at ¥141.63 represents the first downside target ahead of last week’s ¥140.95 five month low.
Resistance above the 200-day SMA at ¥142.72 can be seen at Wednesday’s ¥143.27 low.
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