GBP/USD outlook: Cable dips further after downbeat UK Retail Sales

Slobodan Drvenica Windsor Brokers

GBP/USD

Cable remains in red for the second consecutive day and extends pullback from new one-year high (1.3044).

Weaker than expected UK retail sales increase pressure on sterling and add to bets for BoE rate cut in August (currently at 44%).

Fresh bears broke below the floor of recent consolidation (around Fibo 23.6% of 1.2615/1.3044 upleg), generating initial bearish signal, with extension below cracked rising 10DMA (1.2914) to validate the signal and close below 1.2879 (Fibo 38.2%) to generate initial reversal signal.
Also, formation of bull-trap above 1.30 barrier on weekly chart, may add to downside risk.

On the other hand, daily studies are still predominantly bullish (MA’s in bullish setup / strong positive momentum), suggesting that current pullback could be seen as correction of larger uptrend, if dips find firm ground above 1.2830 zone.

Res: 1.2942; 1.3000; 1.3044; 1.3100.
Sup: 1.2879; 1.2860; 1.2828; 1.2777.

Interested in GBP/USD technicals? Check out the key levels

1. R3 1.3063
2. R2 1.3038
3. R1 1.2991
PP 1.2966
1. S1 1.2919
2. S2 1.2894
3. S3 1.2847

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

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