The currency pair GBPJPY is experiencing a decline in value at a rate of 185.686, primarily because of the release of Japan’s moderately low inflation data.

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• GBP/JPY trades lower due to moderate Japan’s inflation data.

The pair currently trades last at 185.686.

The previous day high was 186.47 while the previous day low was 185.57. The daily 38.2% Fib levels comes at 185.91, expected to provide resistance. Similarly, the daily 61.8% fib level is at 186.13, expected to provide resistance.

GBP/JPY trades lower around 185.60 during the Asian session on Friday, extending losses for the second consecutive day. The Japanese Yen (JPY) gets support from moderate Japan’s inflation data released early in the day. That said, National Consumer Price Index (YoY) remained consistent at the rate of 3.3%, better than the expected 2.5% in July. The annual National CPI ex Food, Energy improved to the reading of 4.3% from 4.2% in the previous month. While National CPI ex-Fresh Food reduced to figure 3.1% as expected, which was 3.3% prior.

Furthermore, the moderate trade data released from Japan on Thursday served as a supporting factor for JPY, potentially capping the gains of the GBP/JPY pair. The better-than-expected annual Export figure could offer some support to the JPY, it’s worth noting that this figure actually declined compared to the previous reading, marking the first such decline in almost two and a half years.

The fall in Japan’s export figure could be attributed to concerns over a global recession, particularly as China’s demand weakens. China is a major trading partner for Japan, and a decrease in its demand for goods can ripple through global trade networks and affect the economy as it heavily relies on exports.

On the other hand, the market participants seek further clues on the upward strength in GBP/JPY pair as it has already shown strength, primarily driven by the improved earnings and inflation figures released during the week.

These resilient economic data could amplify the concerns over interest rate hikes by the Bank of England (BoE) in the September meeting. The market participants will closely watch the upcoming release of United Kingdom (UK) Retail Sales (MoM) later in the day. In July, consumer spending is expected to reduce to the reading of -0.5% from the 0.7% figure in the previous month.

Technical Levels: Supports and Resistances

GBPJPY currently trading at 185.57 at the time of writing. Pair opened at 185.89 and is trading with a change of -0.17 % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 182.69, 50 SMA 181.78, 100 SMA @ 175.59 and 200 SMA @ 168.97.

The previous day high was 186.47 while the previous day low was 185.57. The daily 38.2% Fib levels comes at 185.91, expected to provide resistance. Similarly, the daily 61.8% fib level is at 186.13, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 185.48, 185.07, 184.58
• Pivot resistance is noted at 186.39, 186.88, 187.29

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