GBP/USD analysis: bearish potential increased, 1.4000 key
|GBP/USD Current price: 1.4034
- Poor UK retail sales undermined Pound.
- UK employment and preliminary GDP figures to be out this week.
The GBP/USD pair advanced up to 1.4144 on the back of broad dollar's weakness early Friday, yet poor UK Retail Sales figures and a resurgent greenback ahead of the weekend resulted in the pair losing over 100 pips, to close at 1.4034. UK sales volumes rose by just 0.1% in January from the previous month and 1.6% from a year earlier, well below market's expectations. Sales excluding volatile fuel prices were also tepid, up 0.1% and 1.5% respectively. Furthermore, the Office of National Statistics report indicated that in the longer-term picture, the sector shows a continued slowdown. The week with start in slow motion for the UK, with the kingdom just releasing the Rightmove House Price index on Monday. UK employment figures will be out on Wednesday, while preliminary Q4 GDP will see the light on Thursday, both set to rock the Pound. Technical readings in the daily chart lean the scale toward the downside, as the pair faltered around the 61.8% retracement of its latest daily decline, now battling with the 50% retracement and a flat 20 DMA. Indicators in the mentioned chart have lost their upward strength, the Momentum below its 100 level, and the RSI currently around 55. Shorter term, and according to the 4 hours chart, the downside potential seems limited as long as the price holds above Friday's low of 1.3996, as the pair bounced from a bullish 20 SMA, while technical indicators remain within positive territory, with the RSI aiming to regain the upside around 55.
Support levels: 1.3995 1.3960 1.3920
Resistance levels: 1.4070 1.4110 1.4140
View Live Chart for the GBP/USD
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