GBP/JPY is currently trading near the weekly low of 180.20 in early Friday’s Asian session, extending its five-day losing streak. The cross-currency pair remains mildly under pressure, despite being within a bullish chart formation of a one-month-old falling wedge.
The immediate upside movement for the pair is capped by the 200-SMA level at approximately 180.55 and the psychological resistance of 181.00. Traders are closely watching for the release of the UK Retail Sales for June, expected at 0.2% MoM compared to the previous 0.3%, which could influence the pair’s direction.
To regain control, GBP/JPY buyers need to overcome the resistance near the upper trendline of the falling wedge, currently around 181.25.
If the pair manages to surpass 181.25, it could face further challenges from the 100-SMA level near 182.00 and the monthly high around 184.00.
Should GBP/JPY continue to climb beyond 184.00, the spotlight will turn to the theoretical target of the wedge breakout at approximately 185.75.
On the downside, the immediate support lies at the monthly low of around 179.50, followed by the lower trendline of the falling wedge, which is currently near 179.30. The RSI level below 50.0 adds to the bearish pressure.
A drop below 179.30, supported by disappointing UK Retail Sales data, could prompt the bears to target the 61.8% Fibonacci retracement of the June-July upside, which is located close to 177.00.
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