- British retailers witnessed their slowest sales growth in 11 months in July.
- On August 2, the Bank of England (BoE) raised interest rates for the 14th consecutive time.
- Speculators decreased their bullish positions on the sterling for the second consecutive week.
Today’s GBP/USD price analysis is bearish. On Tuesday, the pound experienced a decline. However, it managed to stay above the lows of the previous week that had lasted for a month. Notably, a survey indicated that British retailers witnessed their slowest sales growth in 11 months in July. The reason behind this was attributed to rainy weather and high inflation.
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The British Retail Consortium (BRC) reported a 1.5% increase in retail sales values compared to last year. This growth rate is less than half the 12-month average, 3.9%. Moreover, it marks a decrease from this year’s high point of 5.2% in February.
On August 2, the Bank of England (BoE) raised interest rates for the 14th consecutive time. Furthermore, it announced that borrowing costs would remain elevated due to the enduring presence of inflation.
However, investors are shifting their focus toward the bleak prospects of the UK economy. According to assessments from the money markets, they are banking on a maximum of two additional rate hikes from the BoE.
Meanwhile, in the week leading up to August 1, speculators decreased their bullish positions on the pound for the second consecutive week. The Commodity Futures Trading Commission data does not include positions taken following the BoE’s rate decision.
On the other hand, asset managers reduced their long pound positions by half from the previous week’s record high.
GBP/USD key events today
After the retail sales report, there won’t be more major economic releases from the UK or the US. Consequently, the pair might consolidate as investors await more data.
GBP/USD technical price analysis: Price retests 30-SMA as 1.2775 resistance holds firm.
GBP/USD is testing the 30-SMA support on the charts after failing to go above the 1.2775 resistance level. There was a short-lived shift in sentiment to bullish when the price broke above the 30-SMA resistance, and the RSI crossed above 50.
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However, bulls could not break above 1.2775. If the 30-SMA holds firm as support, bulls will likely make another attempt at the resistance. Still, if the price breaks below the SMA, bears will regain control with the next targets at 1.2700 and 1.2603.
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