A series of important EU and UK economic figures were released this morning.
The Eurozone’s economic engine, Germany, has seen its 2016 Q4 GDP first readings rose to 0.4% q/q, from 0.1% in Q3, however, lower than the expectations of 0.5%. In addition, the GDP for Q3 was revised lower to just 0.1%, from 0.2%. The Q4 GDP y/y n.s.a fell to 1.2%, from 1.5% in Q3, and lower than the expectations of 1.7%.
The German ZEW economic sentiment and current situation in February also underperformed. The economic sentiment fell to a 4-month low of 10.4 in February from 16.6 in January. The current situation fell to 76.4 in February from 77.3 in January.
The Eurozone Q4 GDP second readings fell slightly to 1.7% y/y and 0.4% q/q, from 1.8% y/y and 0.5% q/q of the first readings.
We have also seen the release of a series of the UK inflation figures for January this morning.
The PPI output and input (YoY) were 3.5% and 20.5% respectively, higher than the expectations of 3.2% and 18.0%.
The CPI and core CPI were 1.8% and 1.6%, although lower than the expectations of 1.9% and 1.8%, the CPI was up from a rate of 1.6% in December.
GBP/JPY has formed a consolidation pattern since the end of January.
The price has retraced noticeably this morning as it was trading below the two resistances: the short-term major down trend line resistance, and the 50 SMA resistance level at 142.70. The upside selling pressure is heavy.
The price is likely to be held temporarily above the support line at 141.00. However, if the support is broken, the bearish momentum will likely further test the downside mid-term major uptrend line support.
The daily Stochastic Oscillator is crossing over from above, suggesting a further retracement.
The resistance level is at 141.60, followed by 142.00 and 142.70.
The support line is at 141.20, followed by 141.00 and 140.70.