GBPUSD Slumps to 1.3039 After Weak UK Retail Sales

GBPUSD gives up over 50 pips after weaker retail sales data from the UK. United Kingdom Retail Sales (month over month) registered at -0.6%, well below forecasts of  0.7% in December, the yearly reading came in at 0.9% also below estimates of 2.6%. Retail Sales ex-fuel (year over year) came in at 0.7% below expectations of 2.9%. Above that the previous figure of -0.6% revised down to -0.8%.

The reduced political risk in December it didn’t really help the UK economy. The disappointing retail sales data might add to pressure in Bank of England for a rate cut in the January policy meeting.

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GBPUSD Technical Outlook

GBPUSD turned lower after weaker than expected UK retail sales and cancelled the mini three-days rally from 1.2953. Bulls keep the control of the GBPUSD pair despite today’s sharp downside move.

On the downside initial support for GBPUSD stands at 1.3039 the daily low. More bids might emerge at 1.3020 the 50-day moving average. The next support zone for the pair  will be met at 1.2953 the low from January 14th.

On the upside initial resistance stands at 1.3118 the daily top. If the GBPUSD bulls break above the daily high more bids might enter the action for a move higher to the next resistance at 1.3169 the high from January 8th. A step above that level would target the next hurdle  at 1.3265 the top from January 2nd.

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