FXEMPIRE
All
Ad
Corona Virus
Stay Safe, FollowGuidance
World
98,398,725Confirmed
2,107,324Deaths
70,685,355Recovered
Fetching Location Data…
Advertisement
Advertisement
Vladimir Zernov
GBP/USD

GBP/USD Video 22.05.20.

Advertisement

UK Retail Sales Decline By 18.1% Month-Over-Month

GBP/USD continues to trade near 1.2200 after the release of new UK economic data.

Advertisement
Know where GBP/USD is headed? Take advantage now with 

75% of retail CFD investors lose money

UK Retail Sales were down 18.1% month-over-month and decreased by 22.6% year-over-year in April as virus containment measures put heavy pressure on consumer activity.

Excluding fuel, Retail Sales dynamics look a bit better, showing a decline of 15.2% on a month-to-month basis.

Yesterday, the market digested Flash PMI data for both the U.S. and the UK. In the U.S., Flash Manufacturing PMI rose from 36.1 in April to 39.8 in May, while Flash Services PMI grew from 26.7 in April to 36.9 in May.

In the UK, Flash Manufacturing PMI increased from 32.6 to 40.6 while Flash Services PMI jumped from 13.4 to 27.8.

In both countries, the services sector had a strong rebound as virus containment measures were relaxed. Services were the hardest-hit sector of the economy as lockdowns hurt them much more than manufacturing, and a rebound in services may signal that the job situation will soon start to improve.

The key question for GBP/USD dynamics is whether the Bank of England will decide to use negative interest rates to boost recovery.

At this point, the Bank of England relies on QE to improve the economic situation. If the rates go into the negative zone, GBP/USD will experience significant selling pressure.

Technical Analysis

GBP/USD failed to settle above the key resistance level at 1.2250 and continues to trend down. The nearest support level for the pair is located at 1.2170.

If this level is breached to the downside, GBP/USD will gain additional downside momentum and head towards the next support level at the low of the recent downside move at 1.2080.

I’d note that failure to settle above 1.2250 is a bearish signal for GBP/USD, so the downside scenario is more likely at this point.

On the upside, the pair will have to deal with the major resistance at 1.2250 and the resistance at the 20 EMA at 1.2280. Most likely, the whole area between 1.2250 and 1.2280 will serve as a material resistance area for GBP/USD.

If the pair gets above this level, it will gain upside momentum and head towards the next resistance level at the 50 EMA at 1.2360.

 

Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Trade With A Regulated Broker

  • Your capital is at risk
IMPORTANT DISCLAIMERS
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
RISK DISCLAIMER
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
FOLLOW US