- Sterling continues to grind lower as market sentiment continues to slump.
- Economic calendar is a thin showing for the GBP/USD this week.
The GBP/USD is trading flat ahead of Wednesday’s London session, cycling near 1.3250.
Tuesday saw the Sterling drop off of the 1.3300 major level as broad market sentiment turned sour and knocked riskier assets lower in favor of the Greenback and Japanese Yen, but the GBP managed to recover from a low of 1.3204 through the New York window.
Wednesday is a fairly dry showing for the GBP/USD, and the only slated showing for the pair on the economic calendar is the GFK Consumer Confidence Index for May later on at 23:01 GMT, forecast at -8 from the previous period’s showing of -9.
Slowing economic conditions continue to hamper the Sterling, and late Tuesday saw the British Retail Consortium’s (BRC) survey of UK retail stores decline by 1.1% in May, the largest one-month drop since January of 2017. The Bank of England (BoE), still licking its wounds after having been knocked off their hawkish stance by dismal economic figures that saw the central bank forced out of an anticipated rate hike in early May, is now expected to hold off on a rate hike until September of this year, but even that is assuming that fiscal growth can come back on track.
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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