GBPUSD Continues To Lose Ground against Strong Greenback

The GBPUSD pair on Tuesday dropped off of the 1.3300 level as broad market sentiment turned sour and knocked riskier assets lower in favor of the Greenback and Japanese Yen, but the GBP managed to recover from a low of 1.3204 through the New York window. The GBP/USD is trading flat ahead of Wednesday’s London session, cycling near 1.3254 to 1.3270 price range. Slowing economic conditions continue to hamper the Sterling, and the British Retail Consortium’s (BRC) survey data of UK retail stores released early today morning declined by 1.1% in May, the largest one-month drop since January of 2017. The Bank of England (BoE), is still affected by their decision to move to dovish stance because of dismal economic figures that prevented the central bank from making a rate hike in May. The central bank is now expected to hold off on a rate hike until September of this year, but even that is assuming that fiscal growth can come back on track.

GBPUSD Still in Trouble

GBP has closed down against the Greenback for six consecutive weeks thus far and continues to trade soft for the seventh consecutive week, falling nearly 8% from April’s high at 1.4376. The macroeconomic calendar in the kingdom has little to offer this week, nothing that can interfere with the ongoing bearish trend. There is no major UK release for rest of today’s trading session.

Investors wait for Nationwide HPI data and Mortgage data scheduled to release on Tuesday and Manufacturing PMI data scheduled to release on Friday in UK’s calendar before making any major bets. In US calendar investors await Preliminary GDP data and ADP Non-Farm Employment Change data scheduled to release later today. Looking at the pair in technical perspective, the pair seems to be deep inside bear’s territory. The short-term picture favors the downside, as a bearish 20 SMA keeps leading the way lower, acting as dynamic resistance now around 1.3315. Intraday price action suggests a minor bounce, rather than a more meaningful reversal, the broader technical trend remains bearish for the GBP following the pair’s loss of support at 1.3710/15 at the start of the month. Expected support and resistance for the pair in short term are at 1.3160 / 1.3130 and 1.3315 / 1.3350 respectively.