Forex: GBP/USD falls below 1.5900 after US consumer sentiment

FXstreet.com (Barcelona) - The GBP/USD keeps on falling during Friday trading, currently extending losses to 1.5878 low. The pair had tried to reach the 1.6000 psychological level ahead of the London session and printed its high at 1.5996, before easing across the chart and eventually even losing the 1.5900 handle after the release of the US consumer sentiment data.

The US Reuters/Michigan Consumer Sentiment preliminary data was released, and while consensus pointed to a rise from 72.9 to 75.0 in January, actual data surprised negatively by falling to 71.3.

Earlier, UK retail sales came in during the London morning, having contracted in December (-0.1% vs +0.2% consensus) and eased on the annualized basis (from +0.9% to +0.3% vs +1.1% consensus). Excuding fuel, retail sales fell -0.3% on the month and eased from +2.0% to +1.1% on the year.

Commerzbank analysts say that the 1.5873/30 zone is key support: “It is the location of the 55 and 200 week ma and the November low - failure here will be regarded as key”, wrote analyst Karen Jones, pointing to the 2009-2013 support line at 1.5602 in case of a drop below 1.5830. “Rallies are expected find initial resistance at 1.6047/61 and to struggle 1.6170/85 and while capped here the risk will remain on the downside”, Jones added.

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