GBP/JPY remains depressed near multi-day lows, below 131.00 mark

• GBP/JPY remained under some selling pressure for the third straight session on Friday.
• Weaker-than-anticipated UK monthly retail sales data exerted some pressure on GBP.
• Escalating US-China tensions benefitted safe-haven JPY and added to the selling bias.

The GBP/JPY cross remained depressed through the mid-European session and was last seen trading near the lower end of its daily trading range, just below the 131.00 mark.

The cross extended this week’s retracement slide from 50-day SMA resistance near mid-132.00s and witnessed some follow-through selling for the third consecutive session on Friday. The downtick was sponsored by a weaker tone surrounding the British pound and a goodish pickup in demand for the safe-haven Japanese yen.

Following a brief consolidation through the early part of Friday’s trading action, the British pound witnessed some intraday selling following the release of weaker UK macro data. In fact, the UK monthly retail sales plunged more-than-expected by 18.1% MoM in April, while the core retail sales also missed expectations and fell 15.2%.

On the other hand, the safe-haven Japanese yen benefitted from the prevalent cautious mood around the global financial markets. Concerns over a further escalation in diplomatic tensions between the United States and China took its toll on the global risk sentiment, which was evident from a softer tone surrounding the equity markets.

With Friday’s downfall, the cross has retreated nearly 200 pips over the past three trading session but has still managed to hold above a near two-month low touched on the first day of the week. Hence, it will be prudent to wait for some strong follow-through buying before positioning for the resumption of the GBP/JPY pair’s recent downward trajectory.

Technical levels to watch