GBP/USD dips, retail sales loom

GBP/USD has recorded losses on Thursday, after posting four successive sessions in positive territory. Currently, the pair is trading at 1.3224, down 0.29% on the day.

British retail sales next

The week wraps up with UK retail sales, the primary gauge of consumer spending. Investors are bracing for a soft release for October, with an estimate of -0.3%. Retail sales have been in positive territory since April, when the indicator plunged 18.1%, when the Covid-19 pandemic first spread in the UK. If the upcoming release shows contraction, investors could give the British pound a thumbs-down.

Brexit talks postponed

Negotiations on Britain’s departure from the EU were unexpectedly disrupted on Thursday, as the EU announced that one of its negotiators had contracted Covid-19. The talks were already on a tight deadline, as the UK will leave the EU’s single market and customs union on December 31st. It remains unclear if an agreement has even been reached, but the financial markets have priced in a zero chance of a non-deal Bexit. This means that if no deal were to be reached, we could expect the pound to fall sharply.

The suspension of face-to-face talks between the EU and the UK due to Covid is the latest setback in what has been an agonizing process of the UK unwinding from the EU, which has gone on since the Brexit referendum in June 2016. With less than six weeks until the UK bids adieu to the European Union, it’s a safe bet that there were will be further twists and turns before the clock mercifully strikes midnight on December 31st.

GBP/USD Technical

  • GBP/USD broke below support at 1.3239 in the Eur0pean session. Below, there are support levels at 1.3208 and 1.3171
  • There is resistance at 1.3307, followed by resistance is 1.3344
  • GBP/USD continues to flirt with the 10-day MA line

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.

Kenny Fisher

Kenny Fisher

Market Analyst at OANDA
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including Investing.com, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.