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  • Japan’s trade balance and retail sales flashed welcome figures while industrial production and unemployment rate remained dicey.
  • Brexit pessimism continues to challenge the GBP buyers and will be in the focus due to lack of data.

GBP/JPY is taking the rounds near 143.80 during early Friday after the data dossier from Japan ran out of steam.

The details suggest, Tokyo consumer price index (CPI) ex-fresh food for April, also known as Tokyo core CPI, grew more than 1.1% forecast and prior to 1.3% on a yearly basis while Tokyo CPI (YoY) beat 0.8% expectations and 0.9% earlier mark with 1.4% increase. Further, Japan’s unemployment rate for March rose to 2.5% from 2.4% market consensus and revised 2.3% prior whereas retail sales (YoY) surpassed 0.8% expected and 0.6% prior (revised) with 1.0% gain.

On the negative side, industrial production (YoY) for March dropped -4.6% versus -0.6% forecast and -1.1% prior.

Despite witnessing the absence of British economic statistics, the British Pound (GBP) was mostly down after Brexit uncertainty continues to haunt the optimism. Early Thursday news reports that the UK PM Theresa May’s position is secured for the time being couldn’t please the GBP buyers for long as cross-party deadlock offers no clear signal of Brexit bill. The UK PM May is now likely to wait till EU election before putting her proposal into the parliament for voting.

While there prevails no major data/events from the UK and Japan data dossier also ran out of steam, pair traders might concentrate on Brexit developments and risk-events in order to determine near-term trade direction.

Latest comments from global central banks, including Governors of the RBNZ and the BOC, coupled with positive developments at the US-China trade talks and the US-Japan negotiations may improvement risk-sentiment and can pull the pair back from the support.

Technical Analysis

GBP/JPY continues to follow two-month-old descending triangle formation with the pattern support around 143.70 gaining additional strength from the 100-day simple moving average (SMA). Should prices slip under 143.70, 38.2% Fibonacci retracement of January – March upside at 142.50 followed by 140.90 can flash on the chart.

Alternatively, a successful break of 200-day SMA level of 144.55 can trigger the quote’s rise to 144.80, 145.20 and then to 50-day SMA level of 145.85.