GBP/USD Forecast: breaking lower, despite positive UK data

Valeria Bednarik FXStreet

The GBP/USD pair fell down to 1.2971 after London's opening, as the dollar is generally stronger across the board, helped by an advance in equities in Asia that backed a strong opening in European ones, and a dovish BOJ that sent the yen lower by delaying the timing the country will reach its inflation target by a year. Better-than-expected UK Retail Sales helped the pair to bounce back above the 1.3000 figure, but after the dust settled, the pair eased again.

Sales in the kingdom were up by 0.6% in June, up from -1.1% in May, and by 2.9% when compared to a year earlier, with the core readings, excluding volatile fuel prices, also beat expectations. Gains were attributed to a warmer weather, a temporal factor.

Anyway, the pair is already trading at fresh weekly lows in the 1.2960 region, and clearly bearish according to the 4 hours chart, as the 20 SMA in the mentioned time frame turned south well above the current level, whilst technical indicators resumed their declines within bearish territory. The current price zone is a strong static support, which means the pair could consolidate around it before taking next step.

A downward acceleration should result in a test of 1.2920 first, while further slides could see the pair reaching 1.2870. Above 1.3010, the risk turns back towards the upside, with scope then to retest 1.3060.

View live chart of the GBP/USD

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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