The volume of retail sales in Britain fell by 1.4% in May – quite a plunge. Early expectations stood on a drop of 0.5%. GBP/USD is now falling to support.
Pound/dollar fell to 1.6115, just above support at 1.6110, which holds for now. It stood on 1.6160 before the publication.
April saw a nice rise in retail sales. This was partially attributed to the enthusiasm towards the Royal Wedding that took place at the end of the month. The reversal was expected, but not so sharp.
GBP/USD fell sharply in recent days, losing the important support region of 1.6280 – 1.630. If support at 1.6110 is broken, the next level is 1.60, followed by 1.5940.
The pound was hit by rising unemployment reported yesterday. Britain saw another disappointing and large in jobless claims, almost 20,000. Inflation remains high at 4.5%, although core inflation is slightly more moderate.
Apart from the British weakness, the ongoing crisis in Greece also adds to a stronger dollar and a weaker pound. As the European Union is split about a solution, riots in Greece undermine the fragile government, which is on the brink of collapse. For the recent, updates, see the EUR/USD Daily forecast.
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