GBP/USD: outlook for August 21-25

GBP/USD: outlook for August 21-25

2019-11-11 • Updated

Reports released this week in the UK showed a mixed picture. Consumer price inflation in Britain unexpectedly held steady in July at an annual rate of 2.6%, despite the fact that analysts were looking forward to a higher number. This news diminishes the pressure on the Bank of England to raise interest rates – not a positive factor for the pound. Retail sales growth exceeded forecasts on the monthly basis, although advance of the indicator in 3 months through July was the weakest in almost 4 years.

In the coming days, Britain will release the second estimate of its GDP growth in the second quarter. According to the initial data, the UK economy expanded by only 0.3% – that’s weak in comparison with last year’s figures.

Uncertainty about Brexit and global risk concerns are having a negative impact on the British currency.

GBP/USD broke below the 50-day MA at 1.2930 at the start of the week and is now consolidating above the 100-day MA at 1.2870. The pair’s currently trading at support line, which connects March and June lows. Decline below the recent lows and 61.8% retracement of June-August rally will open the way down towards the next Fibo level at 1.2735 and 200-day MA at 1.2640. Resistance levels are at 1.2930 and 1.3000. 



Pound Sterling’s Foggy Future
Pound Sterling’s Foggy Future

Weaker recoveries were seen in both the UK manufacturing and service sectors, with the latter recording the greatest loss of momentum since July.

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