GBPJPY has been trending higher since the start of the month, forming higher lows and higher highs inside a rising channel. Price is retreating from the channel resistance and might be due for a pullback to nearby support levels.

The Fibonacci retracement tool shows where buyers might be waiting, as the 38.2% Fib already seems to be holding as support. A larger correction could reach the 50% level near the 160.00 major psychological mark and mid-channel area of interest or the 61.8% Fib at 159.44.

The 100 SMA is above the 200 SMA to indicate that the path of least resistance is to the upside or that support levels are more likely to hold than to break. These indicators are also near the 61.8% Fib to add to its strength as support.

Stochastic looks ready to turn higher after dipping close to the oversold region, suggesting that buyers are eager to return. However, RSI has plenty of room to drop before reflecting exhaustion among sellers, so price could still follow suit.

Earlier today, the UK reported stronger than expected retail sales for January. Consumer spending picked up by 0.5% versus the estimated 0.3% decline and previous 1.2% slump.

However, most of UK data has been downbeat so far this week, as indicators of inflation reflected weaker price pressures. In turn, this could mean lower odds of more interest rate hikes by the BOE since policymakers will no longer be under pressure to keep price levels in check.

Meanwhile, the yen appears to be waiting on confirmation about the next BOJ Governor. Ueda has been quoted saying that the central bank’s policies are appropriate and that further easing could be needed, which might mean even more downside for the yen.

Still, risk-off flows could favor the lower-yielding currency, as recession fears and interest rate expectations remain in play.