British Pound (GBP) Latest: GBP/USD Treading on Support, UK Retail Sales Beat Lowly Expectations
British Pound (GBP) – EU/UK Talks and GBP/USD Forecast, Chart and Analysis:
- UK retail sales beat expectations but the outlook remains gloomy.
- EU/UK trade talks continue with the backdrop less acrimonious.
Sterling Down But Not Out
GBP/USD is down around two big figures this week, from high to low, and needs to consolidate around current levels if it is to push back higher in the near-term. The pair are finding short-term support from one technical indicator but the early trading range is tight and a break lower cannot be ruled out.
UK retail sales for May beat lowly expectations and April’s numbers, with non-food stores providing the largest boost, but the ONS noted that the 12.8% fall in the three months to May was the largest drop since records began in 1996. Fuel sales also picked up as travel restrictions were eased in May. UK borrowing however surged by GBP55.2bn in May while the UK’s debt to GDP ratio rose above 100% for the first time since 1963.
The post-Brexit trade talks between the EU and UK continue with both sides agreeing to intensify talks next month in order to prevent a no-deal scenario at the end of the year. UK PM Boris Johnson told French President Emmanuel Macron yesterday that he sees no point extending talks beyond the end of summer, while the EU see the end of October as the final date to be able to get a deal ratified in time. While nothing has changed, commentators note that recent talks have been slightly more constructive than before, a positive sign after months of rancour.
The British Pound is on the back foot against a firmer US dollar and hit a near three-week low yesterday. GBP/USD is trying to confirm support off the 50-day moving average at 1.2414 to prevent a move back down to the Fibonacci 50% retracement level at 1.2306.
GBP/USD Daily Price Chart (November 2019 – June 19, 2020)
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