Weaker than expected UK retail sales add to pound’s bearish stance
Cable holds in red and extends steep fall into fourth straight day, on track for the biggest weekly fall since the second week of June 2020.
Sterling weakened on Brexit tensions and delayed lift of Covid restrictive measure and came under increased pressure on hawkish Fed that lifted dollar, while today’s weaker than expected UK retail sales data added to negative signal.
The pair fell to new six-week low (1.3854) in early European trading on Friday, with Thursday’s close below 100DMA (1.3936) and today’s break through pivotal Fibo support at 1.3890 (61.8% of 1.3669/1.4249), generating fresh bearish signals which look for confirmation on weekly close below 1.3890 Fibo level.
Bears eye 1.3800 (May low / near Fibo 76.4%), which guards weekly higher base at 1.3690 zone.
Oversold conditions and week-end profit-taking after strong fall may slow bears, with upticks under broken psychological 1.40 barrier to provide better selling opportunities.
Res: 1.3936; 1.3950; 1.4000; 1.4021
Sup: 1.3854; 1.3800; 1.3715; 1.3690