Sterling Slump Persists Following Disappointing UK Retail Sales

Sterling slump continues as UK retail sales disappoint. GBP/USD news and analysis. Bearish momentum is likely to persist.

GBP/USD News and Analysis

• UK retail sales disappoint, sending GBP/USD lower in early trade on Friday.
• The bearish momentum in GBP/USD will likely continue into the weekend.
• UK Retail Sales Disappoint in August

Sterling Slump Persists Following Disappointing UK Retail Sales

UK retail sales largely failed to improve on July’s rain-affected print as rising oil prices and weaker online sales contributed to the less-than-stellar results. In the coming days, the Bank of England’s decision to halt interest rate hikes this week will likely bring relief to the average British household, thanks to recent progress on inflation. However, elevated oil prices will keep a lid on consumer spending heading into the fourth quarter and the festive Christmas season.

GBP/USD Bearish Momentum Likely to Continue into the Weekend

The impressive selloff, which began in the middle of July, has stepped up a gear after the Bank of England (BoE) signaled a possible end to the hiking cycle after promising to keep interest rates at “sufficiently restrictive” levels for “sufficiently long” to get inflation back to the target. With markets pricing in only a slight chance of another BoE hike by the end of the year, sterling has had the rug pulled out from underneath it.

Hurtling through 1.2345 with ease, GBP/USD now looks to 1.2200 as the next level of support, but the RSI has entered oversold territory – meaning it would not be unusual to see a slight reprieve as early as next week, perhaps. However, the pair’s long-term trend continues to thrive, with few indications of a slowdown. Resistance holds at 1.2345.

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