- GBP/USD fell below 1.30 yesterday despite the big beat on the UK retail sales.
- US retail sales also bettered estimates, sending the dollar higher against most majors.
- Sterling could be headed lower to 1.29, having created another bearish lower high last week.
The path of least resistance for the GBP/USD appears to be on the downside.
The British Pound slipped below 1.30 and closed under the April 5 low of 1.2987 yesterday, validating the bearish lower high of 1.3133 created last Friday. Notably, that is the third bearish lower in the last four weeks.
The bearish move happened despite the upbeat UK data - consumer spending, as represented by retail sales, rose 1.1 percent in March, smashing expectations of a negative print.
While Sterling failed to pick up a strong bid, the greenback found takers on the back of upbeat US retail sales report. Consumer spending rose 1.6% in March, the strongest pace of growth since September 2017, beating the consensus forecast was for a 1% rise. The previous month's print was also revised higher.
As a result, cable suffered a bearish close below 1.2987. Sterling's inability to cheer strong UK data, coupled with the bearish close below 1.30 indicates scope for a deeper drop to 1.29 - the lower edge of the falling wedge pattern seen on the daily chart. The drop will likely happen in the first half of the next week and the will likely trade comatose today as major FX trading hubs are closed on account of Good Friday holiday.
The outlook would turn bullish if the falling wedge is breached to the higher side. As of writing, the pair is trading at1.2990, representing marginal gains on the day, while the falling wedge resistance is seen at 1.3080.
Technical Levels
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD alternates gains with losses near 1.0720 post-US PCE
The bullish tone in the Greenback motivates EUR/USD to maintain its daily range in the low 1.070s in the wake of firmer-than-estimated US inflation data measured by the PCE.
GBP/USD clings to gains just above 1.2500 on US PCE
GBP/USD keeps its uptrend unchanged and navigates the area beyond 1.2500 the figure amidst slight gains in the US Dollar following the release of US inflation tracked by the PCE.
Gold keeps its daily gains near $2,350 following US inflation
Gold prices maintain their constructive bias around $2,350 after US inflation data gauged by the PCE surpassed consensus in March and US yields trade with slight losses following recent peaks.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.