• GBP/USD has been recovering as the greenback retreats. 
  • Weak UK data and dovish comments BOE comments weigh on the pound. 
  • Thursday's technical chart is pointing to further falls.

No data, no problems – the pound manages to recover as it gets a break from disappointing data. US dollar weakness also helps. Will it continue? The next moves depend on consumer statistics.

Sterling suffered on Wednesday after inflation fell to 1.3% yearly – the weakest in three years. The disappointing data joined devastating growth – or negative growth – in November and dovish comments from members of the Bank of England. There is growing speculation that the BOE will cut rates in its upcoming meeting in two weeks' time. 

Nevertheless, GBP/USD has recaptured 1.30. Why?

Apart from the lack of new UK figures on Thursday's economic calendar, cable is rising in response to the dollar's weakness. The market mood remains upbeat after the US and China signed Phase One of the trade deal.

While the agreement fails to remove all tariffs and is contingent on the implementation of massive Chinese purchases of US goods, markets remain upbeat. The risk-on mood is weighing on the safe-haven dollar.

Retail sales focus

The US releases consumption data for December, which also includes some of the November's Black Friday sales. The shopping festivity came out late last year and some of the data will only appear in the upcoming report. After mediocre figures last time, significant rises are expected. 

See Preview: ‘Twas the month after Christmas

Traders will have to wait until Friday to see the results of Britain's Christmas sales with some seeing the figures as the tipping point toward a rate cut by the BOE.

Tensions are also mounting ahead of next week's Purchasing Managers' Indexes for January. The first forward-looking figures for after the UK's December elections may shed are another piece in the puzzle ahead of the critical January 30 decision. 

Overall, speculation about the BOE, US retail sales, and trade headlines are set to move the pound

GBP/USD Technical Analysis 

GBP USD technical analysis January 16 2020

Pound/dollar has bounced off the long-term uptrend support line – dating back to November – but remains below the 50, 100, and 200 Simple Moving average. Momentum and the Relative Strength Index are balanced.

Overall, the trend is moderately bearish.

GBP/USD is capped at 1.3060, which is the daily high and where the 50 SMA meets the price. It is followed by 1.31, 1.3125, 1.3170, and 1.3210, which were all high points on the way down.

Support awaits at 1.3010, a swing low from last week, followed by 1.2950, the weekly low, and 1.29, a trough around Christmas. 


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.

Analysis feed

Latest Forex Analysis

Editors’ Picks

EUR/USD moving one step closer to 1.1000

The shared currency remains under pressure amid dismal local data and persistent demand for the greenback in a risk-averse environment. EUR/USD trading near a daily low of 1.1009.


GBP/USD trims early gains, trades in the red

The GBP/USD pair has retreated from its daily high of 1.3105 and now trades marginally lower daily basis near 1.3050, amid dollar’s strength, looming BOE and Brexit.


Crypto market: FOMO mode on, the late-comer's doubt

The crypto market opens the trading week by taking advantage of the momentum of the movement that started early Sunday morning. As if it were an established rhythm, this week it is time to go up after going down the previous one, and up again the previous one.

Read more

WTI: Bears going to town with the coronavirus, fresh lows of $52.18 printed

Oil priced are under pressure, extending a drop from just below the $66 handle at the start of his year to fresh lows at $52.18.

Oil News

USD/JPY: Bears lead on the run to safety

Coronavirus getting stronger, infections to continue to rise. Risk-off Monday, an empty macroeconomic calendar exacerbates sentiment trading. USD/JPY to accelerate its decline on a break below 108.65, a critical Fibonacci support level.


Forex Majors