GBP/USD Touches 10-Day Lows At 1.2800 Amid USD Strength
The GBP/USD pair renewed 10-day lows and was last seen around the 1.2800 price level during the American session. Although the pair has recovered a little bit from the lows, it is still in the bearish territory amid a broader strength in the US Dollar.
The 1.2870 level in the GBP/USD chart also coincides with the 50% fib retracement level. In addition, the 100 SMA is also present near it which makes it an important pivot point. If the 1.2870 is confirmed as resistance, then the next target for the GBP/USD bears will be the 1.2800, followed by the 1.2700.
If we look at the other scenario (bullish), the GBP/USD may extend the recovery and reach the 1.2900 resistance level. If this level is broken, the next stop for the GBP bulls will be 1.2930, followed by 1.300 where the 50 SMA is also present. However, a break above 1.300 will only happen if the GBP/USD forms a stable base above 1.2870.
GBP/USD Remains Bearish In Short-Term
If we look at the short-term, the GBP/USD trend is bearish as it continues to close lower for the 5th day in a row. In fact, the Pound/Dollar pair closed below the 1.2850 level for the first time ever in the last 10 trading days.
If we look at the fundamental front, the US labor department revealed a decline of 228,000 in the initial jobless claims. This is one of the lowest readings and is thus lending strength to the US Dollar.
A little earlier, we also got the retail sales data from the UK, which jumped by 0.7% during June. This reading was much better than analysts' expectations, as they were only forecasting a 0.2% increase.
Meanwhile, the UK finance minister made it clear that they need to avoid spending recklessly and that the economy is at a crucial juncture. He added that the recent inflation data shows that the plan is indeed working.