- GBP/USD stays subdued, recovery moves capped around monthly top.
- UK retailers report record Q2 growth, NI unionists convey dislike over post-Brexit trade barriers.
- UK PM Johnson pushes for caution even as activity restrictions will be removed on July 19.
- Covid updates, US CPI become the key catalysts.
GBP/USD fades late Monday’s bounce off 1.3839 around 1.3880 during the initial Asian session on Tuesday. In doing so, the cable pair struggles for clear direction as bulls as bears jostle over mixed clues. While upbeat UK retail sales and hopes of unlock back the buyers, PM Boris Johnson’s cautious comments and Brexit woes tease the pair sellers of late.
As per the latest British Retail Consortium (BRC) data, per Reuters, sales in the second quarter of 2021 were 28.4% higher than a year earlier and 10.4% higher than two years before. The news also mentioned that the year-on-year increase was the largest since the BRC's records began in 1995. Additionally, UK’s Barclaycard says, “Spending at pubs and bars rose by most since September 2020 due to warm weather and sporting events,” per Reuters.
Alternatively, the coronavirus concerns are becoming grim of late even as the policymakers stay intact on July 19 unlock deadline. Recently, UK PM Johnson said that life cannot go back to normal after restrictions are lifted. The fears of witnessing 100,000 cases in summers have been testing the optimists of late.
Also negative for GBP/USD traders was the July 12 parade by hundreds of Northern Ireland (NI) Orange Order members. “This year's Twelfth of July parades were smaller than usual and locally based due to Covid-19 concerns. Orangemen also protested about post-Brexit trade arrangements and burned Irish tricolor on bonfires,” said the UK’s Daily Mail.
Elsewhere, a light calendar keeps markets sluggish as the coronavirus (COVID-19) woes test the market optimism at the end of Q2 2021.
Against this backdrop, Wall Street benchmarks refreshed record top on Monday but S&P 500 Futures print mild losses by the press time.
Moving on, US Consumer Price Index (CPI) for June will be the key ahead of Fed Chair Jerome Powell’s Testimony. Above all, covid concerns are important to watch.
Read: US Consumer Price Index June Preview: Has inflation peaked?
Technical analysis
Failures to provide a decisive break beyond 100-day EMA, around 1.3895, keep GBP/USD sellers directed towards the monthly low of 1.3731.
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 remains depressed near 1.0700 ahead of Lagarde, US data
EUR/USD is trading close to 1.0700, on the defensive in the European session. The US Dollar is extending post-US NFP gains amid cautious optimism, as investors assess the Fed rates outlook. Eurozone Sentix data slumps to -17.1 in June. Lagarde, US data awaited.
GBP/USD drops below 1.2400 amid firmer US Dollar
GBP/USD is falling below 1.2400 amid a notable US Dollar demand, dragging the major lower for the second successive day on Monday. Markets repricing of the Fed interest rates outlook push the US Treasury bond yields higher, in turn, the US Dollar. US ISM Services PMI next of note.
Gold finds short-term cushion above $1,940, more downside looks solid
Gold price has found a short-term cushion near $1,943.00, however, more downside seems favored. Gold price witnessed an intense sell-off after a mean-reversion move to near the 200-period EMA at $1,977.32.
Pro-XRP attorney says Ripple has 25% chance of winning against SEC, Judge could announce verdict by September
Ripple has a 25% chance of winning its legal battle against the US SEC, according to pro-XRP attorney John Deaton. Over the weekend, Deaton shared his opinion on Ripple’s likelihood of both an outright win and a partial victory.
Services PMIs the next focus after last week’s bumper US jobs report
While US markets finished the week on a high, after another bumper jobs report and a positive week across the board, markets in Europe, while finishing the week on a high, struggled to match the exuberance of investors on the other side of the Atlantic.