The GBPJPY is bouncing back from the lower Bollinger Band despite the recent release of UK Retail Sales, which revealed a weakening of consumer spending. The report showed a decline from the previous month and fell short of analysts' projections, which had anticipated a milder decrease. Traders are expected to closely monitor the currency pair in light of the forthcoming release of significant economic data that could impact currency valuations.
Overview
The GBPJPY is bouncing back from the lower Bollinger Band despite the recent release of UK Retail Sales, which revealed a weakening of consumer spending. The report showed a decline from the previous month and fell short of analysts' projections, which had anticipated a milder decrease. Traders are expected to closely monitor the currency pair in light of the forthcoming release of significant economic data that could impact currency valuations.
Key Economic Events
Friday 06:00 am (GMT+0): Retail Sales m/m (GBP)
Friday 12:30 pm (GMT+0): Core Retail Sales m/m (CAD)
Friday 12:30 pm (GMT+0): Retail Sales m/m (CAD)
Technical Analysis
The GBPJPY has maintained an upward trajectory since January 2, displaying a consistent pattern of higher peaks and troughs. Following a recent a-b-c correction, the currency pair has demonstrated resilience, rebounding from the lower Bollinger Band with support from the 50-period Exponential Moving Average (EMA) and the Momentum oscillator. Specifically, the price remains positioned above the EMA, while the Momentum indicator exhibits values surpassing the 100 baseline.
Potential Upside Targets
If the bulls manage to take control of the market, traders may consider the following four potential upside targets:
204.834: The first price target is 204.834, which matches the lowest price seen on July 14 and aligns with the 20-period Simple Moving Average.
205.785: The price target for the second objective is 205.785, reflecting the highest exchange rate achieved on July 16 and coinciding with the weekly Pivot Point.
208.110: An additional resistance level is set at 208.110, corresponding to the highest exchange rate reached in 2024.
209.935: The fourth price target is calculated at the R2 weekly Pivot Point at 209.935.
Potential Downside Targets
If the bears manage to maintain control of the market, traders may find potential opportunities in the following four downside targets:
202.097: The initial level of support is expected at 209.097, corresponding to the daily low recorded on July 17.
200.823: The second downside target is calculated as the 261.8 percent Fibonacci Extension, drawn from the swing low of 203.832 to the swing high of 205.785.
198.927: The third line of support is calculated at 198.927, corresponding to the S3 weekly Pivot Point.
197.199: An additional support level is estimated at 197.199, representing a daily low reached on June 6.
Conclusion
In conclusion, the GBPJPY currency pair has shown resilience despite recent negative data from UK Retail Sales, indicating a potential rebound as it bounces back from the lower Bollinger Band. It is essential for traders to remain up-to-date on the latest geopolitical and economic developments, trade wisely, and closely monitor market trends to optimize investment returns and mitigate probable risks and losses.