Mario Blascak, PhD
Independent Analyst
- The GBP/USD is trading flat at around 1.2720 after the UK retail sales rose strongly in July.
- The GBP/USD retreated from the 14-month low of 1.2666 but remains capped by 1.2750.
- The UK retail sales rose 0.7% in July after falling -0.5% m/m in June while core retail sales excluding motor fuel sales rose 0.9% in July after falling -0.6% m/m in June.
The GBP/USD remains under selling pressure stuck close to 1.2720 level against the US Dollar after falling as low as 1.2666 on Thursday marking fresh 14-month low.
US Dollar pulled back from cyclical highs early on Thursday as the news on the US and China getting back to trade negotiations hit the market with China’s delegation led by a deputy commerce minister visiting Washington DC in late August to discuss “issues of mutual concern.”
The UK total retail sales increased 0.7% over the month in July after slumping unexpectedly in June. Core retail sales stripping the basket off motor fuel sales increased 0.9% m/m. Over the year, total retail sales accelerated to 3.5% y/y in July while core retail sales increased 3.7% y/y.
Although UK retail sales boosted Sterling temporarily it is still trapped in the downward sloping trend channel and as the currency pair broke below 1.2755 representing 100% retracement of the move from 1.2755 to a cyclical high of 1.4377 reached on April 12 this year, the new low of below 1.2666 is the next target.
Technical oscillators on 1-hour chart including Momentum, the Relative Strength Index moved to the neutral territory and wait for the decisive move. The Slow Stochastics though made a bearish crossover in the overbought territory. With the support of solid fundamental, the GBP/USD is prone to move higher with 1.2755 being the immediate resistance on the upside. Break above 1.2755 should see GBP/USD testing 1.2800.
GBP/USD 1-hour chart
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Recommended Content
Editors’ Picks
EUR/USD holds above 1.0650 after US data
EUR/USD retreats from session highs but manages to hold above 1.0650 in the early American session. Upbeat macroeconomic data releases from the US helps the US Dollar find a foothold and limits the pair's upside.
GBP/USD retreats toward 1.2450 on modest USD rebound
GBP/USD edges lower in the second half of the day and trades at around 1.2450. Better-than-expected Jobless Claims and Philadelphia Fed Manufacturing Index data from the US provides a support to the USD and forces the pair to stay on the back foot.
Gold is closely monitoring geopolitics
Gold trades in positive territory above $2,380 on Thursday. Although the benchmark 10-year US Treasury bond yield holds steady following upbeat US data, XAU/USD continues to stretch higher on growing fears over a deepening conflict in the Middle East.
Ripple faces significant correction as former SEC litigator says lawsuit could make it to Supreme Court
Ripple (XRP) price hovers below the key $0.50 level on Thursday after failing at another attempt to break and close above the resistance for the fourth day in a row.
Have we seen the extent of the Fed rate repricing?
Markets have been mostly consolidating recent moves into Thursday. We’ve seen some profit taking on Dollar longs and renewed demand for US equities into the dip. Whether or not this holds up is a completely different story.