Mario Blascak, PhD
Independent Analyst
- The GBP/USD is trading below 1.3000 after the UK retail sales came out below market forecast in June.
- Total retail sales fell -0.5% m/m in June while core retail sales excluding motor fuel sales decreased 0.6% m/m.
- Falling retail sales add to the uncertainty regarding the prospects for the Bank of England hiking rates in August.
Sterling is under pressure after the UK retail sales fell more than expected in June with the positive household spending related to cheerful atmosphere from English squad proceeding in the Football World Cup in Russia failed to materialize.
Total retail sales fell -0.6% over the month in June, with core retail sales excluding the motor fuel sales falling -0.5% over the month compared to an increase of 0.4% and 0.3% respectively expected by the market.
Lower retail sales in the UK add to the negative news stemming from the UK economy of late possibly derailing the Bank of England from hiking the Bank rate in August.
On Wednesday, the UK inflation data saw headline inflation rising 2.4% over the year, unchanged from May while core inflation stripping the consumer basket off food and energy prices decelerated to 1.9% y/y in June. The data saw Sterling falling lower sharply to 1.3000 and although the GBP/USD recovered overnight, the lower-than-expected UK retail sales saw Sterling fall below 1.3000 temporarily.
Technically, the GBP/USD is in the downward sloping channel and 1.3000 represents an important psychological barrier for the currency pair. Once the GBP/USD break below 1.3000 level decisively, the next hurdle is the round big figure of 1.2900.
GBPUSD 1 hour chart
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Recommended Content
Editors’ Picks
AUD/USD consolidates near 19-month peak as traders await US PCE Price Index
AUD/USD oscillates in a range below the 0.6900 mark, as traders opt to move to the sidelines ahead of the US PCE Price Index. In the meantime, the RBA's hawkish stance, the optimism led by additional monetary stimulus from China, the prevalent risk-on mood, and a bearish USD continue to act as a tailwind for the pair.
USD/JPY holds above 145.00 after the Tokyo CPI inflation data
The USD/JPY pair attracts some buyers to near 145.20 on Friday during the early Asian session. The pair gains ground near three-week highs after the Tokyo Consumer Price Index. The attention will shift to the US Personal Consumption Expenditures Price Index for August, which is due later on Friday.
Gold price holds steady near record peak; looks to US PCE data from fresh impetus
Gold price consolidates below the all-time high set on Thursday amid overbought conditions on the daily chart and the risk-on mood, though dovish Fed expectations continue to act as a tailwind. Bulls, meanwhile, prefer to wait for the release of the US PCE Price Index before placing fresh bets.
Ethereum investors show bullish bias amid ETF inflows and positive funding rates, exchange reserves pose risk
Ethereum traded around $2,640 on Thursday, up more than 2% following increased bullish bias among investors, as evidenced by ETH ETF net inflows and an uptrend in funding rates. However, investors may be wary of a potential correction from ETH's rising exchange reserve.
RBA widely expected to keep key interest rate unchanged amid persisting price pressures
The Reserve Bank of Australia is likely to continue bucking the trend adopted by major central banks of the dovish policy pivot, opting to maintain the policy for the seventh consecutive meeting on Tuesday.
Five best Forex brokers in 2024
VERIFIED Choosing the best Forex broker in 2024 requires careful consideration of certain essential factors. With the wide array of options available, it is crucial to find a broker that aligns with your trading style, experience level, and financial goals.