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GBP/USD Daily Forecast – British Pound Is Mostly Flat After Retail Sales Data

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·2-min read
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UK Retail Sales Declined By 0.9% In August

GBP/USD is currently trying to settle below the support level at 1.3800 while the U.S. dollar is mostly flat against a broad basket of currencies.

The U.S. Dollar Index managed to settle above the resistance at 92.80 but failed to get to the test of the 93 level. In case the U.S. Dollar Index settles above 93, it will head towards the resistance at 93.10 which will be bearish for GBP/USD.

UK has recently reported that Retail Sales declined by 0.9% month-over-month in August compared to analyst consensus which called for growth of 0.5%. On a year-over-year basis, Retail Sales were flat, while analysts expected that they would grow by 2.7%.

Foreign exchange market traders will also continue to monitor the developments in U.S. government bond markets. The yield of 10-year Treasuries managed to get above the 50 EMA at 1.33% and is trying to develop additional upside momentum. In case this attempt is successful, U.S. dollar may get more support.

Technical Analysis

GBP/USD continues its attempts to settle below the support level at 1.3800. RSI remains in the moderate territory, and there is plenty of room to gain additional downside momentum in case the right catalysts emerge.

In case GBP/USD manages to settle below the support at 1.3800, it will get to another test of the next support level at 1.3780. A successful test of this level will open the way to the test of the support at 1.3745. In case GBP/USD gets below 1.3745, it will continue its downside move and head towards the support at 1.3710.

On the upside, a move above 1.3800 will push GBP/USD towards the resistance at the 50 EMA at 1.3815. In case GBP/USD settles above this level, it will head towards the next resistance at 1.3835. A successful test of this level will push GBP/USD towards the next resistance level which is located at 1.3865.

For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire

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