- The British pound falls for the first time in the week, retreats from weekly highs.
- Worse than expected, US economic data failed to boost the GBP.
- Robust UK’s economic data failed to underpin the GBP.
- GBP/USD Technical Outlook: Failure at the 200-DMA opens the door for a fall towards the 100-DMA.
On Friday, a pack of solid UK macroeconomic data failed to underpin the British pound, which struggled to cling to the 1.3700 figure, falling during the New York session. At press time, the GBP/USD is trading at 1.3670. It is worth noting that in the last hour, the US Dollar Index reclaimed the 95.00 level, up some 0.25%, sitting at 95.05, underpinned by the rise of the US 10-year T-bond yield, up to 1.75%, a three basis points gain.
The market sentiment is downbeat, as shown by the majority of the European equity indices trade in the red, while the US stock indices record losses between 0.05% and 0.73%. In the FX market, safe-haven peers, like the USD, the JPY, and the CHF, appreciate.
US Retail Sales and Industrial Production disappoint
On Friday, the US Department of Commerce unveiled December’s Retail Sales report, which showed a contraction of 1.9%, worse than the -0.1% estimated by economists. Excluding gasoline and autos, slid, even more, 2.5%, lower than November’s 0.1% drop. In the meantime, US Industrial Production shrank 0.1%, when analysts forecasted a 0.3% growth.
Adding fuel to worse than expected US economic data releases, the UoM Consumer Sentiment fell to 68.8, versus 70.0 estimated.
In the overnight session for North American traders, the UK economic docket featured the Gross Domestic Product for the UK in November rose 0.9%, the first time compared to pre-pandemic levels from February 202. Meanwhile, Industrial Production increased 1% in November, compared to the October reading.
Concerning the UK’s Covid-19 cases, the UK reported 99,652 new Covid-19 cases and 270 deaths, lower than the 335 reported on Thursday.
GBP/USD Price Forecast: technical
The GBP/USD daily chart depicts a formation of an evening star candle pattern, right at the confluence of the 200-DMA that could propel the GBP/USD towards the 100-DMA.
On the way down, the first support would be January 12 daily low at 1.3621. A breach of the latter would expose the confluence of the January 11 daily low and the abovementioned 100-DMA at 1.3551. If that level gives way, the GBP/USD could be tumbling towards 1.3500.
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 breaks below 1.1000 on stellar NFP
The buying bias in the Greenback gathers extra pace on Friday after the US economy created far more jobs than initially estimated in September, dragging EUR/USD to the area of new lows near 1.0950.
GBP/USD breaches 1.3100 after encouraging US Payrolls
The continuation of the uptrend in the US Dollar motivates GBP/USD to accelerates its losses and breaches 1.3100 the figure in the wake of the release of US NFP.
Gold rebounds from daily lows and flirts with $2,670
Following a post-NFP dip to the $2,640 region, Gold prices now embarks on an acceptable rebound and retest the area of $2,670 per ounce troy despite the marked advance in the US Dollar and rising US yields across the board.
US Payrolls surge in September, as 50bp rate cut ruled out
US payrolls data surprised on the upside in September, rising by 254k, smashing expectations of a 150k rise. The unemployment rate fell to 4.1% from 4.2%, average hourly earnings increased to a 4% YoY rate and there was a 72k upwards revision to the previous two months’ payrolls numbers.
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.