GBP/USD extends losses below 1.3000 ahead of UK Retail Sales

  • GBP/USD drops to seven-day lows.
  • UK’s new immigration plan, the Canada-styled deal with the EU spice-up the EU-UK tussle off-late.
  • The US dollar remains on the front foot amid fresh risk-off, positive fundamentals.
  • US Philadelphia Fed Manufacturing Survey, Chinese headlines will also be the key.

GBP/USD drops to 1.2910 while heading into the London open on Thursday. The EU-UK tussle over post-Brexit trade deal as well as broad US dollar strength recently dragged the quote to the lowest in seven days. The Cable traders will now focus on the January month UK Retail Sales data for immediate direction.

While the EU’s chief Brexit negotiator Michel Barnier turned down the UK’s signal for the Canada-style trade deal with the region, he already knew that Tories will stand ready to criticize the move. Additionally, the Britons defied the EU diplomat’s demand to return the Elgin Marbles in the post-Brexit trade deal. At home, the opposition is doing all they can to turn down the “clueless” Home Secretary Priti Patel’s latest immigration plan while the EU is in the tension of the budget ahead of the first EU summit post-Brexit.

Over the counter, the US Dollar manages to keep the gains as not only the shift in risk sentiment but comparatively upbeat fundamentals also please the greenback lovers. China’s latest coronavirus numbers again surprised markets based on the re-revised methodology. Though, this doesn’t stop downbeat comments from the International Monetary Fund’s (IMF) Managing Director Kristalina Georgieva and rating giant S&P.

It should also be noted that a rate cut from the People’s Bank of China (PBOC) and Aussie employment data have earlier favored the USD. Further, the US 10-year treasury yields and Asian stocks are back to the red after rising the previous day.

The UK Retail Sales, expected to rise 0.7% versus 0.9% prior, will be closely watched to confirm the latest bullish bias following positive prints of inflation and employment data. On the other hand, the US Philadelphia Fed will also be the key as traders might want to confirm the greenback’s strength amid the coronavirus contagion.

Technical Analysis

A 15-week-old rising trendline, around 1.2885, can act as the immediate support ahead of aiming the 50% Fibonacci retracement of the pair’s October-December 2019 upside, at 1.2855. On the upside, a clear break of 50-day SMA level of 1.3060 enables the buyers to aim for the monthly high near 1.3070. It’s worth mentioning that the 1.3000 psychological magnet offers the immediate upside barrier.

Additional important levels

Today last price 1.2909
Today Daily Change -15 pips
Today Daily Change % -0.12%
Today daily open 1.2924
Daily SMA20 1.3013
Daily SMA50 1.3058
Daily SMA100 1.2949
Daily SMA200 1.2693
Previous Daily High 1.3024
Previous Daily Low 1.2907
Previous Weekly High 1.307
Previous Weekly Low 1.2872
Previous Monthly High 1.3281
Previous Monthly Low 1.2954
Daily Fibonacci 38.2% 1.2952
Daily Fibonacci 61.8% 1.2979
Daily Pivot Point S1 1.2879
Daily Pivot Point S2 1.2835
Daily Pivot Point S3 1.2762
Daily Pivot Point R1 1.2996
Daily Pivot Point R2 1.3069
Daily Pivot Point R3 1.3113



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