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MENAFN- Daily Forex)
- In the last trading session of last week, the GBP/USD exchange rate attempted to stabilize and rebound upwards following the release of the latest US retail sales data.
- However, the rebound gains did not exceed the 1.3070 level, and its losses in the same week reached the support level of 1.2973, the lowest for the GBP/USD pair in over two months.
According to Forex trading, the price of the US dollar (USD) was confined to a narrow range against most of its counterparts last Thursday after the release of the latest US retail sales data. According to the results of the economic calendar, the September index recorded a reading higher than market expectations on Thursday afternoon, rising from a previous reading of 0.1% to 0.4%, ahead of more modest expectations of 0.3%. However, despite the retail sales data that exceeded expectations, the“US dollar” struggled to stabilize, as it was undermined by the mixed market mood.
In contrast, the pound struggled to attract investors as a lack of UK data left the pound vulnerable to disappointing inflation figures on Wednesday. Last month, the UK consumer price index came in below expectations, with the Office for National Statistics reporting that headline inflation fell below the Bank of England's 2% target for the first time in three years.
This fuelled bets on consecutive interest rate cuts by the Bank of England in November and December, significantly weakening the appeal of the pound after the release. While the pound managed to recover most of its losses from the sell-off, the currency continued to struggle to gain ground on Thursday amid the absence of other economic catalysts.
For the US dollar, Friday's data calendar will feature no domestic data, which could leave the US dollar vulnerable to changes in market risk appetite.
According to stock trading platforms, UK stocks fall after retail data, set for weekly gains. The FTSE 100 closed slightly lower on Friday as investors priced in a surprise rise in UK retail sales, which rose 0.3% in September versus an expected 0.3% decline. Gains in the industrial metals miners' sector, up 1.3% on higher copper prices amid Chinese stimulus, helped limit losses. However, consumer stocks pushed the index higher, with Unilever down 0.6% and British American Tobacco down 3.2%. Despite Friday's decline, the FTSE 100 rose more than 1% on the week, its best performance in two months, driven by expectations of a rate cut by the Bank of England and strong corporate updates. The housebuilders sector outperformed, rising about 6.5% on the week.
Top Forex Brokers1 Get Started 74% of retail CFD accounts lose money Technical forecasts for the GBP/USD pair today:
As we mentioned before, the movement of the GBP/USD price around and below the support level of 1.3000 will give the bears the strongest opportunity to move in the downward direction to more losses, and the next most important support for the trend may remain the level of 1.2850, which in turn will move the technical indicators towards strong oversold levels. On the other hand, and on the same time frame on the daily chart, the resistance level of 1.3170 will remain the most important to break the current downward trend. Ultimately, the gains of GBP/USD will remain limited and vulnerable to a rapid collapse.
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