Gbpusd drops 0.27% as UK retail sales decline sharply

GBPUSD Analysis

Performance after Monday
Period	Pct	Chg	Momentum
Monday	-0.27%	-34.5 Pips
Week to-date	-0.27%	-34.2 Pips
December	-0.34%	-43.4 Pips

Upcoming key events (London Time)

No major events for the day.

What happened lately

In the United Kingdom, the British Retail Consortium (BRC) reported a significant decline in like-for-like retail sales for November. The metric fell to a negative 3.4%, down sharply from 0.3% recorded in October. This downturn in retail sales indicates a contraction in consumer spending, which could be attributed to various factors such as economic uncertainty or increased inflationary pressures affecting purchasing power. The negative figure also suggests that retailers may be experiencing difficulties in attracting consumers, leading to a tighter economic climate.

For the GBPUSD forex pair, the recent economic data and retail sales performance could lead to further downward pressure. A decline in retail sales generally indicates weaker consumer demand, which can impact economic growth prospects and potentially weaken currency strength. On Monday, GBPUSD already dropped by 0.27% to 1.26541, reflecting market participants’ reaction to the unfavorable retail sales numbers reported by the British Retail Consortium. With no major events scheduled for the day, traders may continue to scrutinize the economic environment in the U.K., which could result in sustained pressure on the pound if pessimism in retail performance persists.

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What can we expect from GBPUSD today?

GBPUSD on Monday dropped -0.27% to 1.26541. Price is below 9-Day EMA while Stochastic is falling.

Updated daily direction for GBPUSD looks bearish as the pair posted lower in Monday trading session.

Looking ahead for the day, immediate support level is at S1 1.26064 with break below could see further selling pressure towards S2 at 1.25586. To the upside, with the current momentum bearish, we prefer to look at breakout of the recent daily high of 1.27225 as a potential indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below 1.26167 would indicate selling pressure.

For the week to-date, take note that GBPUSD is mixed as compared to the prior week.

Key levels to watch out:

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