GBPUSD – no stronger negative impact on downbeat UK retail sales for now but downside risk remains in play

Slobodan Drvenica Windsor Brokers

GBPUSD

Pound is attempting to stabilize above 1.3900 handle which was retested after quick fall on UK retail sales miss.
Retail sales numbers disappointed in December (m/m -1.5% vs -0.6% f/c and y/y 1.3% vs 3.0% f/c), softening near-term tone and signaling blow for hawks, looking for BoE rate hike in May.
On the other side, fears of US government shutdown keep the dollar under pressure and partially offsetting negative impact from retail sales miss.
However, risk of pullback exists as daily indicators are overbought, with additional pressure coming from significantly weaker retail sales.
Firm break below 1.3900 and session low at 1.3886 will be negative signal, but further easing and daily close in red is needed to generate firmer bearish signal and sideline immediate bulls.
Conversely, bearish threats will be neutralized on sustained break above peaks at 1.3942/45 (Wed / today) that would signal attack at psychological 1.4000 barrier.

Res: 1.3945; 1.4000; 1.4050; 1.4086
Sup: 1.3904; 1.3886; 1.3854; 1.3804

Interested in GBPUSD technicals? Check out the key levels

1. R3 1.4045
2. R2 1.398
3. R1 1.3935
PP 1.387
1. S1 1.3825
2. S2 1.376
3. S3 1.3716

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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