GBP/USD tests below 1.24 as Pound Sterling softens


  • The GBP/USD is testing three-month lows after closing flat or bearish for seven of the last eight weeks.
  • UK data continues to disappoint, suggesting a floundering economic outlook.
  • US data keeps beating expectations, boosting USD in major trading pairs.

The Pound Sterling (GBP) is notably bearish for Thursday, briefly breaking beneath the 1.2400 major handle against the Greenback (USD) as bears keep the GBP pinned to the floor.

Risk appetite continues to waffle for the Pound Sterling after Wednesday’s disappointing showing on the United Kingdom’s (UK) economic calendar docket. Gross Domestic Product (GDP) figures for the UK slipped more than markets expected, with the July figure decreasing by 0.5%, worse than the expected 0.2% decline and wiping out the previous month’s 0.5% gain.

Sterling bulls held back by soft economic data for the UK

Industrial Production for the same month also missed forecasts, with July’s figure printing a worse-than-expected -0.7% (forecast -0.6%), taking a big chunk out of the previous month’s 1.8% increase.

US Consumer Price Index (CPI) figures on Wednesday provided plenty of support for the USD, with inflation figures for the month of August coming in as expected at 0.6%, an acceleration from the previous month’s 0.2%.

On Thursday, the US saw Initial Jobless Claims, Producer Price Index (PPI), and Retail Sales figures. 

Initial Jobless Claims for the week into September 8th came in better than expected, printing at 220K new claimants versus the forecast 225K. The previous week came in at 217K.

The PPI for August came in above forecast, clocking in at 0.7% versus the expected 0.4%, which was in-line with the previous figure. Retail Sales also improved, ticking up to 0.6% against the previous month’s 0.5% showing, and reversing the market forecast slowdown to 0.2%.

Friday will see the economic calendar firmly in the hands of Greenback bulls, with the Michigan Consumer Sentiment Index slated to show a minor decline from 69.1 to 69.5. If the indicator prints at or above expectations, it could give the USD just the bump it needs to extend gains into the weekly close.

GBP/USD technical outlook

The Pound Sterling has chalked in a new daily low below the 1.2400 handle in Thursday trading. Recent declines have taken the pair well below the 100-day Simple Moving Average (SMA) currently sitting at 1.2650, and the 50-day SMA has turned bearish from 1.2750.

A continued slide in the GBP/USD pair will see late May’s swing lows near 1.2300 challenged, while a relief rally for bidders will see the last swing low near 1.2550 acting as near-term resistance.

GBP/USD daily chart

GBP/USD technical levels

GBP/USD

Overview
Today last price 1.2402
Today Daily Change -0.0088
Today Daily Change % -0.70
Today daily open 1.249
 
Trends
Daily SMA20 1.2612
Daily SMA50 1.2749
Daily SMA100 1.2656
Daily SMA200 1.2431
 
Levels
Previous Daily High 1.2512
Previous Daily Low 1.2435
Previous Weekly High 1.2643
Previous Weekly Low 1.2446
Previous Monthly High 1.2841
Previous Monthly Low 1.2548
Daily Fibonacci 38.2% 1.2464
Daily Fibonacci 61.8% 1.2482
Daily Pivot Point S1 1.2446
Daily Pivot Point S2 1.2402
Daily Pivot Point S3 1.2369
Daily Pivot Point R1 1.2523
Daily Pivot Point R2 1.2556
Daily Pivot Point R3 1.26

 

 

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