Trading Forex and CFDs is risky
Read HotForex Daily Market Analysis

Sterling is testing the key support levels

Market Analysis

GBPJPY, H1

UK retail sales unexpectedly fell in January data, with the headline figure coming in at -0.3% m/m — the worst m/m figure since 2011 — and 1.5% in the y/y comparison. The median forecast had been for rise of 0.6% m/m and 3.4% y/y. December data were revised loser, compounding the disappointing takeaway from the report, with the m/m figure revised to -2.1% m/m from -1.9%. The already released CBI and BRC January surveys had portended downside rise, and official data have markedly undershot expectations for two consecutive months now. The ONS stats office highlighted that the underlying trend has tilted lower for the first time since December 2013, noting that “the evidence suggests that increased prices in fuel and food are significant factors in the slowdown.” CPI is presently running at 1.8% y/y, and two-and-a-half-year high, while the most recent labour market report showed an unexpected slip in average household earnings. Consumer credit data for December also dropped sharply. It’s premature to conclude that a consumer crunch is taking hold, though sterling markets will be sensitive to any corroborating news on this front as UK growth has been driven by the consumer in recent years.

GBPJPY is testing the key support level of 140.00 due to the poor UK Retail Sales. On the 1 hour chart GBPJPY manage to broke the lower Bollinger Bands. Parabolic SAR and MACD remain negative. In a higher 4-hour timeframe, RSI and MACD seems to be falling towards zero level. Hence these indicators suggesting further weakness. Cable on the other hand, is now showing a 0.7% decline on the day in falling to within a few pips of Wednesday’s low at 1.2383, which also marks the present situation of the 50-day moving average.

 Click here to access the HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our latest webinar and get analysis and trading ideas combined with better understanding on how markets work.

Click HERE to register the next webinar will start in:

Andria Pichidi

Market Analyst

HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.