Friday, January 17, 2020 7:53 AM EDT
UK data this week has been dismal. UK retail sales was the latest release to disappoint:
- MoM -0.6% vs +0.6% exp.
- YoY +0.9% vs 2.9% exp.
Expectations were running high for December retail sales as the data included black Friday and Cyber Monday as well as an expected rebound in confidence following the UK general election.
However, the downbeat numbers show that the improved political landscape following the election didn’t create the boost in sales that was expected, and black Friday was a damp squib. Consumers were not prepared to part with their cash amid so much uncertainty and Brexit just around the corner.
The weak data comes after UK GDP unexpectedly contracting -0.3% in November and inflation unexpectedly dropping to a 3-year low in December. Figures coming from the UK show the economy to be on a slippery downward slope, raising the prospect of a rate cut from the BoE when they meet 30th January.
In the last BoE meeting of 2019, there were two dissenters. Since then Tenreyo, Vlieghe and Carney have adopted a more dovish stance. The pound is falling, reflecting the increased likelihood of BoE cutting interest rates from 0.75% to 0.5%
Levels to watch:
GBP/USD has snapped a three-day winning streak which saw it advance from $1.2950 to $1.3118. The pair is trading down 0.2% on the day and is finding immediate support on 100 sma, with the bullish trend just about intact, although looking shaky at best.
Immediate support can be seen at $1.3039 (today’s low), prior to $1.3025 (yesterday’s low, & 50 sma) and $1.2953 (low 14th Jan).
On the upside, resistance sits at $1.3119 (today’s high) before $1.3169 (high 8th Jan)
(Click on image to enlarge)
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such ...
more
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.
less
How did you like this article? Let us know so we can better customize your reading experience.
