GBP/USD Current price: 1.3808
- UK Retail Sales unexpectedly fell in May against an expected advance.
- The Bank of England is having a monetary policy meeting this week.
- GBP/USD extremely oversold but bearish in the near-term.
The GBP/USD pair traded as low as 1.3791, its lowest since mid-April, ending the week a couple of pips above such a level. The pound fell for a fourth consecutive day, not only pressured by resurgent dollar demand but also by tepid UK data. On Friday, the country published May Retail Sales which were down 1.4% MoM, missing an expected 1.6% advance. Annual sales were up 24.6%, well below the previous 42.4%.
The sour tone of the UK currency was also backed by coronavirus-related concerns amid the exponential growth of new contagions related to the Delta variant, which may delay further easing lockdown measures. Looking ahead, the Bank of England is having a monetary policy meeting. The central bank could turn hawkish on the back of higher inflation, although a rate hike seems unlikely for this year and the next. Should policymakers hint something different, a strong pound reaction could be expected.
GBP/USD short-term technical outlook
From a technical point of view, the GBP/USD pair is bearish. The daily chart shows that the price has broken below a bullish 100 SMA for the first time in almost a year, while the 20 SMA heads firmly lower above it. Technical indicators maintain their bearish slopes within oversold readings. In the 4-hour chart, technical indicators retain their bearish momentum despite being in extreme oversold readings, hinting at further declines ahead.
Support levels: 1.3760 1.3715 1.3680
Resistance levels: 1.3840 1.3890 1.3930
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.