GBP/JPY remains bearish but supported above 138.50

The pound is about to end today slightly higher against the Japanese yen, recovering modestly after hitting yesterday the lowest level since mid-January. Today, an upbeat retail sales report in the United Kingdom boosted the pound in the currency market. 

UK retail sales rebound sharply in Feb, a big beat

The rally following the report helped offset yen’s strength. The Japanese currency lost momentum in the market during the American session amid a recovery of equity markets. 

GBP/JPY bottomed yesterday at 137.75 but managed to end the day above 138.50. Today it fell to 138.25 but then bounced to the upside. The recovery was capped by 139.30 and now it is hovering around 139.00. 

Price continues to move with a bearish bias. The decline so far has been capped by the 138.50 zone. The pair traded below that area on Wednesday and today, but it was rejected. A significant close below level could open the doors for an extension of the decline. 

Technical levels 

To the upside, resistance levels might be located at 139.30 (daily high), 139.80 and the 140.00 (psychological / downtrend line from December highs). On the flip side, support might be seen at 138.30 (daily low), 137.75 (Mar 22 low) and 137.00/05 (Mar 17 low).