GBP/JPY: Recovery remains capped by 20-DMA ahead UK data

The recovery in the GBP/PY cross faltered at 20-DMA, with the bears fighting back control amid increased nervousness heading into the UK retail sales data and BOE decision.

GBP/JPY hold above 135 handle

Currently, GBP/JPY now drops -0.24% to 135.27, eyeing for a retest of 13513 lows. The GBP/JPY cross remains heavily offered, largely on the back of broad GBP weakness as markets take profits off the table ahead of the UK economic release.

The retail sales data is expected to drop -0.5% m/m in August, while on annualized basis too, retail sales are expected to tick lower to 5.3%y. In July, retail sales rose 1.4% over the month.

While the Japanese yen trades muted against its American counterpart, with traders on the back foot ahead of a host of key macro updates from the US docket.

GBP/JPY Levels to consider 

The pair has an immediate resistance at 135.58/62 (5 & 20-DMA), above which 136.10 (10-DMA) could be tested. On the flip side, support is seen at 134.83 (50-DMA) that at 134.41 (Sept 13 low).