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• The GBP/JPY currency pair seemed to be looking down a steep hill as the pair lost ground near 183.00 on Friday.
• Next week features a data-packed economic calendar for the UK.
• The pound struggled to find a floor on mixed UK data that soured investor appetite. 

The GBP/JPY currency pair has struggled to develop meaningful momentum in recent weeks, and it was seen drifting into the low end of the recent consolidation, testing the 183.00 handle ahead of next week’s United Kingdom heavy economic calendar.

This week saw employment and GDP figures for the UK come in below expectations. Wages also ticked higher, keeping inflation concerns elevated.

UK employment numbers printed a -207K,000 reading, worse than the forecast figure of -185,000 and far below the previous read of -66,000. Meanwhile, average earnings for the quarter ending July printed a 8.5% reading, above the previous figure of 8.4%. The UK's economy appears to be caught between a rock and a hard place, with rising wages increasing concerns of inflation amid a flagging employment landscape.

Up Next Week: Japan and UK Economic Data on the Docket

Next week's economic calendar sees Japanese trade balance figures on Tuesday, with both Japanese exports and imports expected to decline. Japan's merchandise trade balance total for August is expected to decline further, forecast to print at -JPY659.1 billion.

Next week will also see UK Consumer Price Index (CPI) figures, retail sales, and the next rate call from the Bank of England (BoE), which is expected to raise the main benchmark rate to 5.5%, up 25 basis points. The BoE makes its appearance on Thursday at 11 GMT.

UK CPI for the month of August is forecast to print at 0.7% on Wednesday. Retail sales are slated for Friday and are expected to show a moderate recovery of 0.5% in August. The previous month saw retail sales decline 1.2%.

Also on Friday will be the Bank of Japan's (BoJ) monetary policy statement and interest rate decision. The BoJ is broadly expected to maintain a negative policy rate of -0.1% as the central bank has struggled to keep inflation above the 2% target heading into the fourth quarter.

GBP/JPY Technical Outlook

The currency pair fell to the 183.00 handle to close out the trading week, down 2% from the week’s high near 182.85. The GBP/JPY pair has struggled to develop momentum from the 34-day Exponential Moving Average (EMA). However, it has been seen trading well above the 200-day Simple Moving Average (SMA), which was recently parked near 171.00.

The pair has traded sideways through a rising trendline from March's lows near the 160.00 major handle, and yen bulls will be looking to develop bearish momentum from here.

GBP/JPY Daily Chart

(Click on image to enlarge)

GBP/JPY Technical Levels

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