• GBP/USD edged lower for the second successive day on Friday amid the UK political turmoil.
  • The disappointing release of the UK Retail Sales did little to provide any meaningful impetus.
  • Subdued USD demand held back bearish traders from placing fresh bets and helped limit losses.

The GBP/USD remained on the defensive following the release of dismal UK macro data and was last seen hovering near the weekly low, around the 1.3585 region.

The pair extended the previous day's sharp retracement slide from the 1.3660 area and witnessed some selling through the first half of the trading on Friday. The British pound continues to be weighed down by the UK political crisis amid growing demands for Prime Minister Boris Johnson's resignation over a series of lockdown parties in Downing Street.

Apart from this, a slump in the UK monthly Retail Sales further undermined sterling and dragged the GBP/USD pair lower for the second successive day. In fact, the UK's Office for National Statistics reported that the total value of inflation-adjusted sales at the retail level plunged 3.7% in December as against market expectations for a fall of 0.6%.

That said, increasing bets for additional rate hikes by the Bank of England, along with the announcement that COVID-19 restrictions in the UK would be lifted next week, helped limit losses for the GBP/USD pair. Moreover, subdued US dollar demand was seen as another factor that held back traders from placing aggressive bearish bets around the major.

The mixed fundamental backdrop warrants some caution before positioning for an extension of the recent pullback from the vicinity of mid-1.3700s, or the highest level since October touched last week. Moreover, investors might also prefer to move on the sidelines ahead of the upcoming central bank event risk – the FOMC meeting on January 25-26.

Technical levels to watch

GBP/USD

Overview
Today last price 1.3588
Today Daily Change -0.0001
Today Daily Change % -0.01
Today daily open 1.3589
 
Trends
Daily SMA20 1.3561
Daily SMA50 1.3416
Daily SMA100 1.3546
Daily SMA200 1.3734
 
Levels
Previous Daily High 1.3662
Previous Daily Low 1.3587
Previous Weekly High 1.3749
Previous Weekly Low 1.3532
Previous Monthly High 1.355
Previous Monthly Low 1.3161
Daily Fibonacci 38.2% 1.3616
Daily Fibonacci 61.8% 1.3633
Daily Pivot Point S1 1.3563
Daily Pivot Point S2 1.3538
Daily Pivot Point S3 1.3488
Daily Pivot Point R1 1.3638
Daily Pivot Point R2 1.3687
Daily Pivot Point R3 1.3713

 

 

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