GBP/USD Erases Thursday’s Gain, Retail Sales Comes in Weak

GBP/USD trading lower today, following the release of UK retail sales. The pair is currently at 1.2403, down 0.67% from Thursday’s North American close.

The inability to hold Thursday’s gain is a negative sign and leaves the bias to the downside heading into next week.

UK retail sales volume fell 0.3% in January and the data for the second month running was much weaker than consensus forecasts which had called for a 0.9% increase on the month. The December data was revised to show a 2.1% decline compared with a 1.9% drop reported previously. There was a decline of 0.4% in the latest three-month period compared with the previous three months and annual growth slowed to 1.5% from 4.3% previously and this was the slowest rate of increase since November 2013.

With a failed test of the 20-day moving average now in place, GBP/USD is vulnerable to a drop to near term support at Wednesday’s low at 1.2383. Support below this low stands at the February 7 low at 1.2346, which corresponds to a 50% retracement of the advance from the January low to the early February intraday high.

In the US today, leading indicators for January are due at 10:00 ET.

GBP/USD Daily Chart

GBPUSD_021717

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Tracy L. Morganthall, CMT, has been a Technical Market Analyst for more than 20 years. She has experience analyzing and producing reports on equities, both domestic and international markets, as well as Forex and commodities. She attended Trenton State College in Trenton, New Jersey, earning a Bachelor's in Finance.