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GBPUSD Struggle Continues, What’s Next?

Key Points

  • British Pound was seen trading lower against the US Dollar today, and even the positive economic data in the UK failed to help.
  • UK Retail Sales released by the National Statistics came in at 2.3% in Jan 2016, above the expectation of 0.8%.
  • The yearly change posted a gain of 5.2%, above the forecast of 3.6%.
  • GBPUSD was down, and currently trading near a major support area on the hourly chart.

Technical Analysis

The GBPUSD pair after trading towards the 1.4400 area failed to maintain momentum and started to move down. The downside move was so strong that the GBPUSD pair is now trading below the 50 and 100 hourly simple moving average.

GBPUSD

The pair is currently trading near a major support trend line on the hourly chart, which is preventing losses. However, a break below it could be a bearish call and may take the pair further down.

On the upside, the 50 hourly simple moving average can be seen as a resistance, followed by the 100 MA.

UK Retail Sales

The UK Retail Sales, which presents the total receipts of retail stores was published today by the National Statistics. The market was lined up for a rise of below 1% in Jan 2016, compared with the preceding month, but the result was impressive. The UK Retail Sales rose 2.3% in Jan 2016.

The report mentioned that “Average store prices (including petrol stations) fell by 2.6% in January 2016 compared with January 2015, the 19th consecutive month of year-on-year price falls“.

The UK retail sales report exceeded the forecast, but the British Pound buyers were not impressed, which leaves it at a risk of break down.

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