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GBP/USD – Pound Struggles to Stay Above 1.30 After Dreadful Week

The British pound has steadied on Monday, after sustaining its worst week in over three years. A soft retail sales report and a dovish message from the Bank of England resulted in sharp losses for the pound.
Kenny Fisher
GBP/USD Price Forecast - British Pound Continues To Power Higher Ahead Of Elections

GBP/USD is trading sideways in Monday trade. Currently, the pair is trading at 1.3015, up 0.08% on the day. In economic news, the week ended on a positive note, as GDP for the third quarter was revised upwards to 0.4%, above the initial release of 0.3 percent. There are no British events on the schedule.

Pound Slides to 1.30

The British pound had a dismal week, as the currency fell 2.5%, its worst weekly performance since October 2016. The post-election euphoria, which lifted the pound above the lofty 1.35 level, has quickly dissipated, as the pound has coughed up most of the gains made in December and has fallen to the 1.30 line.

Weak data and a somber Bank of England weighed heavily on the pound last week. British consumers were in a sour mood in November, as retail sales

 is trading sideways in Monday trade. Currently, the pair is trading at 1.3015, up 0.08% on the day.

Pound Slides to 1.30

The British pound had a dismal week, as the currency fell 2.5%, its worst weekly performance since October 2016. The post-election euphoria, which lifted the pound above the lofty 1.35 level, quickly dissipated, as the pound has coughed up most of the gains made in December and has fallen to the 1.30 line.

Weak British data and a somber Bank of England weighed heavily on the pound last week. British consumers were in a sour mood in November, as retail sales declined by 0.6 percent. This reading was much worse than expected, as the estimate stood at +0.3 percent. No less worrying, retail sales have failed to post gains since July.

The BoE maintained the benchmark rate at 0.75% last week, but was blunt in its concern over risks to the economy, stating: “If global growth fails to stabilize or Brexit uncertainties remain entrenched, monetary policy may need to reinforce the expected U.K. recovery.” Some rate-setters have voted in favor of lowering rates, and if the economy does not show signs of improvement early next year, the bank could lower rates in order to stimulate the economy.

Technical Analysis

GBP/USD continues to put pressure on the 1.3000 line, which is providing immediate support. Below, there is support at 1.2940, which has held firm since the first week of December. On the upside, we find resistance at 1.3050, followed by the round number of 1.3100.

GBP/USD 1-Day Chart

 

Pacific Currencies – Summary

USD/CNY

USD/CNY crossed above 7.000 last week, but is still remaining close to this symbolic line. Currently, the pair is trading at 7.010, up 0.05% on the day. On Friday, China released the CB Leading Index, which is a useful indicator for tracking export orders and loan levels. In November, the index gained 1.5%, up from 1.3% in the October release. With China and the U.S. reaching a limited trade deal, we could see the index post a stronger gain next month.

AUD/USD

AUD/USD posted a winning week for the third straight time.  Currently, the pair is trading at 0.6909, up 0.05% on the day. In economic news, private sector credit remains at low levels. The indicator produced a gain of 0.1% in October, identical to the previous release. This missed the forecast of 0.2%.

NZD/USD

NZD/USD stayed close to the 0.66 line last week and this trend is likely to continue in the upcoming week, which has a light economic calendar. Currently, the pair is trading at 0.6607, up 0.08% on the day.

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