GBP/USD: Focus on UK retail sales and confluence of 50% Fib & 100-day MA
|- The GBP/USD remained under pressure in Asia, but losses were restricted around 1.3090 - 23.6% Fib R of 1.2921/1.3258 and 100-day MA.
- Hawkish Fed minutes and Brexit uncertainty indicate the path of least resistance for GBP is on the downside.
- A below-forecast UK retail sales reading could push the pair below 100-day MA.
The GBP/USD pair is on the defensive in Asia, having established a lower high at 1.3236 on Monday.
More importantly, the pullback from the Oct. 12 high of 1.3258 has neutralized the bullish outlook put forward by the bull flag breakout confirmed on Oct. 5.
Further, the hawkish Fed minutes and Brexit uncertainty indicate that for the near-term, the path of least resistance is to the downside.
Still, the pair managed to defend key support at 1.3090 (100-day moving average (MA) and 23.6% Fib R of 1.2921/1.3258). However, defending that level in Europe could become a tough task if the UK retail sales, due at 08:30 GMT, show a bigger-than-expected drop in consumption in September.
The market is expecting September retail sales to print at -0.4 percent month-on-month, following a 0.3 percent rise in August.
The pound may pick up a bid if the retail sales beat estimates by a big margin, although, a bullish breakout would be confirmed only above the recent high of 1.3258.
GBP/USD Technical Levels
Resistance: 1.3113 (Asian session high), 1.3193 (previous day's high), 1.325 (Oct. 12 high)
Support: 1.3090 (23.6% Fib R of 1.2921/1.3258 + 100-day MA), 1.3050 (61.8% Fib R of 1.2921/1.3258), 1.30 (psychological level)
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.