- Sterling waiting for another punch to come, buyers remain motionless as the GBP/USD tests lower.
- GBP has closed down against the Greenback for five consecutive weeks, looks set to do so for a seventh.
The GBP/USD is flat ahead of Wednesday’s European markets, trading near 1.3250 as bulls continue to sit on the sidelines and watch the slide continue.
The Sterling is down over 8% from April’s high of 1.4376 as economic data for the UK has turned sour and continues to slump, driving the Bank of England (BoE) off of a hawkish perch that saw the central bank walk back a highly-anticipated rate hike in early May. Current market expectations see a rate hike pushed to September of this year, but macro indicators have yet to return to higher numbers as the ‘first-quarter slowdown’ that was initially blamed on bad weather continues to seep further into the mid-year.
Wednesday is going to be a quiet showing for the GBP on the economic calendar, with only the GFK Consumer Confidence Index for May later on at 23:01 GMT, forecast at -8 from the previous period’s showing of -9. Tuesday brought the British Retail Consortium’s (BRC) survey of UK retail stores, which declined by 1.1% in May, the largest one-month drop since January of 2017. The rest of the week shows little of importance on the data docket for the Sterling, bringing little to the table that could entice bulls to return to the tables, especially as the political instability within Italy emanates outward, cooling off risk appetite in global markets.
GBP/USD levels to watch
The pair is still deeply within bearish territory, and as FXStreet’s own Valeria Bednarik noted on the GBP/USD’s technical outlook: “the short-term picture favors the downside, as a bearish 20 SMA keeps leading the way lower, acting as dynamic resistance now around 1.3315 while technical indicators remain within negative territory, with the Momentum lacking directional strength and the RSI heading lower near the weekly low achieved at the beginning of the day. The next relevant mid-term support comes at around the 1.3040/60 region, where it has multiple weekly highs and lows from the last two years.”
Support levels: 1.3200 1.3160 1.3130
Resistance levels: 1.3270 1.3315 1.3350
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