- The Sterling heads into Friday looking for a Hail Mary pick-up to cap off a week of steady declines.
- Brexit headlines have been momentarily forgotten by markets as the UK’s economy continues to waffle below expectations, casting doubt on future rate hikes to come.
This week has been a poor run for the GBP/USD, which is struggling to hang onto the 1.3000 major handle heading into the brunt of Friday’s trading.
The Sterling is currently down over 2% from the week’s highs near 1.3290, and bulls are in full retreat after failing to recapture the pivotal 1.3300 technical level, with short-selling piling onto the weakened currency pair as a triplet of key economic data for the UK failed to impress against median market expectations.
Tuesday’s Average Earnings failed to drive Sterling confidently into new buying positions after coming in exactly as expected, and the week spiraled out from there, with Wednesday’s CPI reading coming in softer than expected, followed by Thursday’s Retail Sales figures, which showed a -0.5% contraction against the previous month. Pound traders now head into Friday with a milder economic calendar line-up, with June’s Public Sector Net Borrowing dropping at 08:30 GMT, expected to tick higher from £3.356 billion to £3.6 billion.
Late Thursday saw Dollar-Bearish comments from US President Donald Trump, who voiced dissatisfaction with the current pace of Fed rate hikes, strongly hinting that he would prefer a slower and lower creep-up of interest rates, but the bullish momentum for the GBP/USD was short-lived as the US Federal Reserve remains an independent entity from the US’ White House administration.
GBP/USD Levels to watch
The Sterling-Dollar’s last-minute bounce to 1.3000 may prove to be just a temporary setback for GBP short-sellers, and things remain camped firmly in bearish territory, according to FXStreet’s own Valeria Bednarik: “technical readings in the 4 hours chart show that the ongoing correction doesn’t affect the dominant bearish trend, as the 20 SMA heads south almost vertically some 80 pips above the current level, while technical indicators have bounced from oversold readings, but remain well into the red.”
Support levels: 1.3000 1.2970 1.2935
Resistance levels: 1.3080 1.3120 1.3155
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