Key points of discussion:
- GBP / USD can’t keep up the momentum
- Retail sales will rise in June as social spending rises Euro 2020
GBP/USD has failed to follow the two – day setback of recent lows, despite a good reading in retail today. The pair had managed to jump 23.6% from the Fibonacci retracement level (1.3577) on Tuesday after the risk-free move showed the lowest level in the last 5 months when US dollar there was a demand for a safe haven.
GBP / USD Daily Chart
The last reading this morning saw Retail growth of 0.5% in June, exceeding expectations by 0.4% and a large improvement compared to the unexpected 1.4% decline in May. The annual figure is also 0.1% higher than expectations, reaching 9.7%, but basic sales fell short of analysts, suggesting that energy and food sales were one of the main factors in June, which would fall with the reopening of the hospitality sector. and growth. Due to the EURO 2020 football championship in outdoor consumption.
However, concerns about the growth of new variants of Covid-19 and a possible new wave of infection could delay consumer confidence, which could reduce retail sales over the next few weeks. It also means markets, as investors are wary of the current scale of economic recovery, which has recovered in many cases around the world, despite successful ongoing vaccination campaigns.
This is likely to mean that GBP / USD will continue to trade negatively sideways as the US dollar shifts in the coming weeks in the face of stronger flows. If the mood continues, the pair may fall below 1.36 again, giving sellers a clear opportunity to bring it further below 1.34, although further weakness is likely to be transient. Upwards, 1.38 is likely to be an area where price pressures are converging, so it is likely to be difficult to achieve a significant break.
– Written by market analyst Daniela Sabin Hathorn
Follow Daniela on Twitter @HathornSabin