The dollar gathered momentum with London opening, putting the GBP/USD pair under pressure ahead of the release of the UK January Retail Sales figures, which anyway fueled the decline as the numbers resulted well below market's expectations, whilst December readings suffered downward revisions. Sales fell in the month by 0.3%, while when compared to January 2016, sales rose by 1.5%, below the 3.4% advance expected and the lowest growth since November 2013. Without fuel, monthly sales decreased by 0.2%, whilst the annual reading came in at 2.6% from previous 4.7% and the expected 3.9%. UK macroeconomic data has been quite disappointing lately, as the economy is finally feeling the impact of Brexit, in the form or rising inflation.
The GBP/USD pair fell down to 1.2402, and trades a few pips below 1.2430, the 38.2% retracement of the latest bullish run, and below the 200 EMA in the 4 hours chart that anyway remains flat. The 20 SMA in the mentioned time frame gains bearish strength above the current level, whilst technical indicators turned south and entered bearish territory.
The weekly low stands at 1.2382, with a break below it exposing 1.2345, the 50% retracement of the same rally and this month low. An extension below 1.2330 should confirm further declines towards the 1.2280/90 price zone.
The pair has an immediate resistance at 1.2480/90, followed by the 1.2540 region. It would take a break above this last, something quite unlikely, to see the pair reversing the negative tone.
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