GBP/USD Forecast: Buyers hesitate after dismal UK data
Premium|You have reached your limit of 5 free articles for this month.
BLACK FRIDAY SALE! 60% OFF!
Grab this special offer, it's 7 months for FREE deal! And access ALL our articles and analysis.
Your coupon code
FXS75
- GBP/USD retreated below 1.2750 in the European session on Friday.
- Retail Sales in the UK declined sharply in July.
- The pair could stay on the back foot in the second half of the day.
GBP/USD failed to clear important technical resistance at 1.2770 and came under renewed bearish pressure following the disappointing UK data early Friday. The near-term technical outlook fails to offer directional clues but the cautious market stance is likely to make it difficult for the pair to gain traction ahead of the weekend.
Retail Sales in the UK declined 1.2% on a monthly basis in July. Retail Sales ex-Fuel contracted 1.4% in the same period. Both of these readings came in worse than analysts' estimate and cause Pound Sterling to weaken against its major rivals.
Pound Sterling price today
The table below shows the percentage change of Pound Sterling (GBP) against listed major currencies today. Pound Sterling was the weakest against the Japanese Yen.
USD | EUR | GBP | CAD | AUD | JPY | NZD | CHF | |
USD | 0.07% | 0.20% | -0.02% | 0.14% | -0.07% | 0.04% | 0.24% | |
EUR | -0.08% | 0.13% | -0.10% | 0.05% | -0.17% | -0.04% | 0.17% | |
GBP | -0.22% | -0.15% | -0.24% | -0.08% | -0.29% | -0.17% | 0.02% | |
CAD | 0.03% | 0.06% | 0.23% | 0.15% | -0.08% | 0.06% | 0.28% | |
AUD | -0.17% | -0.09% | 0.03% | -0.18% | -0.25% | -0.12% | 0.07% | |
JPY | 0.07% | 0.16% | 0.30% | 0.06% | 0.20% | 0.12% | 0.33% | |
NZD | -0.03% | 0.03% | 0.18% | -0.07% | 0.08% | -0.11% | 0.21% | |
CHF | -0.26% | -0.18% | -0.06% | -0.27% | -0.12% | -0.34% | -0.21% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).
In the meantime, the UK's FTSE 100 Index opened in negative territory on Friday, reflecting the negative impact of the dismal UK data on market mood. Additionally, investors continue to stay away from risk-sensitive assets after news of Evergrande, the second-largest developer in Mainland China, filing for protection from creditors in a US bankruptcy court late Thursday.
Unless there is a noticeable improvement in risk perception in the American session, GBP/USD could stay on the back foot. At the time of press, US stock index futures were down between 0.15% and 0.3%, pointing to a bearish opening in Wall Street. The US economic docket will not feature any macroeconomic data releases on Friday.
GBP/USD Technical Analysis
The Relative Strength Index (RSI) indicator on the 4-hour chart retreated to 50, reflecting the loss of bullish momentum. Nevertheless, GBP/USD continues to trade outside the descending regression channel coming from July, possibly discoursing sellers from betting on an extended decline.
1.2700 (psychological level, upper limit of the descending channel) aligns as first support. A 4-hour close below that level could pave the way for another leg lower toward 1.2650 (static level) and 1.2615 (August 15 low, mid-point of the descending channel).
Looking north, the 100-period Simple Moving Average (SMA) forms immediate resistance at 1.2750 before 1.2770 (Fibonacci 23.6% retracement). GBP/USD could regather bullish momentum and target 1.2800 (psychological level) and 1.2830 (Fibonacci 38.2% retracement, 200-period SMA) if it manages to flip 1.2770 into support.
- GBP/USD retreated below 1.2750 in the European session on Friday.
- Retail Sales in the UK declined sharply in July.
- The pair could stay on the back foot in the second half of the day.
GBP/USD failed to clear important technical resistance at 1.2770 and came under renewed bearish pressure following the disappointing UK data early Friday. The near-term technical outlook fails to offer directional clues but the cautious market stance is likely to make it difficult for the pair to gain traction ahead of the weekend.
Retail Sales in the UK declined 1.2% on a monthly basis in July. Retail Sales ex-Fuel contracted 1.4% in the same period. Both of these readings came in worse than analysts' estimate and cause Pound Sterling to weaken against its major rivals.
Pound Sterling price today
The table below shows the percentage change of Pound Sterling (GBP) against listed major currencies today. Pound Sterling was the weakest against the Japanese Yen.
USD | EUR | GBP | CAD | AUD | JPY | NZD | CHF | |
USD | 0.07% | 0.20% | -0.02% | 0.14% | -0.07% | 0.04% | 0.24% | |
EUR | -0.08% | 0.13% | -0.10% | 0.05% | -0.17% | -0.04% | 0.17% | |
GBP | -0.22% | -0.15% | -0.24% | -0.08% | -0.29% | -0.17% | 0.02% | |
CAD | 0.03% | 0.06% | 0.23% | 0.15% | -0.08% | 0.06% | 0.28% | |
AUD | -0.17% | -0.09% | 0.03% | -0.18% | -0.25% | -0.12% | 0.07% | |
JPY | 0.07% | 0.16% | 0.30% | 0.06% | 0.20% | 0.12% | 0.33% | |
NZD | -0.03% | 0.03% | 0.18% | -0.07% | 0.08% | -0.11% | 0.21% | |
CHF | -0.26% | -0.18% | -0.06% | -0.27% | -0.12% | -0.34% | -0.21% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).
In the meantime, the UK's FTSE 100 Index opened in negative territory on Friday, reflecting the negative impact of the dismal UK data on market mood. Additionally, investors continue to stay away from risk-sensitive assets after news of Evergrande, the second-largest developer in Mainland China, filing for protection from creditors in a US bankruptcy court late Thursday.
Unless there is a noticeable improvement in risk perception in the American session, GBP/USD could stay on the back foot. At the time of press, US stock index futures were down between 0.15% and 0.3%, pointing to a bearish opening in Wall Street. The US economic docket will not feature any macroeconomic data releases on Friday.
GBP/USD Technical Analysis
The Relative Strength Index (RSI) indicator on the 4-hour chart retreated to 50, reflecting the loss of bullish momentum. Nevertheless, GBP/USD continues to trade outside the descending regression channel coming from July, possibly discoursing sellers from betting on an extended decline.
1.2700 (psychological level, upper limit of the descending channel) aligns as first support. A 4-hour close below that level could pave the way for another leg lower toward 1.2650 (static level) and 1.2615 (August 15 low, mid-point of the descending channel).
Looking north, the 100-period Simple Moving Average (SMA) forms immediate resistance at 1.2750 before 1.2770 (Fibonacci 23.6% retracement). GBP/USD could regather bullish momentum and target 1.2800 (psychological level) and 1.2830 (Fibonacci 38.2% retracement, 200-period SMA) if it manages to flip 1.2770 into support.
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.