FX Markets Range-Bound: Weekend Gap Risk Limits Trading Activity

Major currency pairs remained confined to tight ranges during Friday's European session, with traders reluctant to establish significant positions ahead of the weekend. EUR/USD held steady near 1.0850, while GBP/USD tested 1.2700 support following disappointing UK retail sales data that plunged -2.7% MoM versus -0.5% expected. USD/JPY consolidated around 157.50 after BOJ Governor Ueda acknowledged Japan's moderate economic recovery, though the central bank signaled no immediate policy changes. Market participants noted heightened caution due to ongoing trade discussions between Japan-US and China-EU, with potential weekend developments creating gap risk. German PPI data showed a -0.2% decline, adding to deflationary concerns in the eurozone. Technical indicators suggest continued consolidation, with major pairs respecting established support and resistance levels as volumes thin ahead of the weekly close.