Gbpusd Drops On Mixed Uk Retail Sales

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Gbpusd Drops On Mixed Uk Retail Sales

Gbp/Usd Drops To 1.2376 On Mixed Uk Retail Sales

The dominant theme in the GBP/USD is one of risk aversion, especially after the release of mixed retail sales data from the UK. To say that the GBP/USD pair went through a volatile and difficult trading day wouldn't be entirely wrong, considering all the geopolitical tension as well.

Meanwhile, the speakers from the Fed and the BoE continue to influence the markets. For now, the GBP/USD is seen near the 1.2376 handle with a -0.48% change.

Gbp/Usd Lurks At 5-Month Low

Earlier, the GBP/USD turned towards 1.2388, which is also the 5-month low for this pair. Now, it seems that the pair has slipped even past this level which suggests that bearish pressure is still dominating the markets.

The deputy governor from BoE passed some comments but they were not enough to support the Cable. According to Ramsden, the BoE will look at the inflation numbers and figure out their implications for the GBP as well. He also commented on how the disinflation process will not be so smooth after all.

Elsewhere, the Fed president from Chicago passed some comments that hint at a more neutral stance. This allowed the greenback to receive a little boost, sending the GBP/USD lower. According to him, the disinflation isn't making progress and has kind of stalled.

As a result, a pause in the upcoming rate cut is a high probability until the disinflation starts to pick pace once again.

According to the UK retail sales data, the disinflation progress has stagnated in the UK during March, when compared with the previous month's reading. The analysts were looking forward to a growth rate of 0.3% on an m/m basis but the actual reading was 0%.

The technical analysis of GBP/USD shows that the GBP/USD is in a downtrend after losing the 1.2400 handle. So unless the GBP bulls manage to reclaim the 1.2400 handle, the sellers will remain the dominant force.

On the way down, the first support is located near 1.2373, which is the lowest point from November 17. The other scenario is that the bulls climb above the 1.240 resistance and turn it into a solid support level. In that case, the next target will be 1.2484, followed by 1.25.

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