GBP/JPY Price Analysis: Loses traction below 183.00 within the descending trend-channel following the UK data

• GBP/JPY remains under selling pressure near 182.65 after the UK's weaker-than-expected data.
• The cross holds below the 50- and 100-hour EMAs with a downward slope on the four-hour chart.
• The immediate resistance level is seen at 183.00; 182.20 acts as an initial support level.

The GBP/JPY cross loses momentum during the early European session on Wednesday. The British Pound (GBP) faces some selling pressure following the softer-than-expected economic data from the UK. The market mood remains cautious as investors await the Bank of England (BoE) interest rate decision on Thursday. The cross currently trades near 182.65, losing 0.31% on the day. 

The latest data from the UK's Office for National Statistics reported on Wednesday revealed that the nation’s Consumer Price Index (CPI) dropped to 6.7% YoY in August from 6.8% in the previous reading, below the market consensus of 7.1%. In the same period, the Core CPI, which excludes volatile food and energy prices, fell to 6.2% from 6.9% in the previous month. Additionally, the Retail Price Index climbed 9.1% YoY in August, compared to expectations of 9.3%. In response to the data, GBP/JPY dropped more than 50 pips to below the 183.00 mark.

From the technical perspective, the GBP/JPY cross trades within the descending trend-channel since the middle of August. The cross holds below the 50- and 100-hour Exponential Moving Averages (EMAs) with a downward slope on the four-hour chart, highlighting the path of least resistance for the cross is to the downside.

The first resistance level of GBP/JPY is seen at a psycholocal mark of 183.00, followed by 183.42 (the 50-hour EMA). The additional upside filter to watch is 183.75 (the 100-hour EMA). Further north, the next stop is located near the upper boundary of the descending trend-channel at 184.55. Any meaningful follow-through buying will see the next stop at 185.25 (a high of August 29)/

On the downside, a decisive break below the lower limit of the descending trend-channel at 182.20 will see a drop to a psychological round figure at 182.00 en route to 181.38 (a low of August 8) and finally at 180.90 (a low of July 30).

Furthermore, the Relative Strength Index (RSI) is located in bearish territory below 50, highlighting that further downside cannot be ruled out.

GBP/JPY four-hour chart