- The Sterling is trading on the downside for Friday after a crushing Thursday wipes out recent gains.
- The week caps off with a thin calendar for the GBP/USD, and risk flows are firmly in the driver’s seat.
The GBP/USD is still hanging about 1.3250 ahead of a thin London session for Friday, with a clear calendar and a large chunk of traders’ attention focused on other things.
The Sterling isn’t having much luck recovering from Thursday’s tumble from 1.3446, making a bullish false break above the current descending channel, and the GBP/USD is now shuffling its feet near the last technical bottom of 1.3202.
Thursday started off bullish for the Pound, with UK Retail Sales printing better than expected, with the m/m Retail Sales for May coming in at 1.3% versus the expected 0.5%. But the bull run sputtered out quickly, after the European Central Bank pushed out hopes of any rates hikes until after the summer of 2019. Markets recoiled at the dovish statements from the ECB, with broader markets piling into safe havens like the Yen and the Greenback, and the safety flights continued further after US economic data cleared expectations, spiking inflation fears into broad markets once again.
GBP/USD levels to watch
The Sterling faces further losses at the hands of soured market sentiment, and as Mohammed Isah noted in his GBP/USD Analysis, “the pair faces further weakness as it closed lower on sell off on Thursday. Support lies at the 1.3200 level where a break will turn attention to the 1.3150 level. Further down, support lies at the 1.3100 level. Below here will set the stage for more weakness towards the 1.3050 level. Its daily RSI remains biased to the downside suggesting more declines. Conversely, resistance stands at the 1.3300 levels with a turn above here allowing more strength to build up towards the 1.3350 level. Further out, resistance resides at the 1.3400 level followed by the 1.3450 level. On the whole, GBPUSD remains biased to downside pressure on trend resumption.”
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