GBP/USD Retreats As Volatility Continues

Technical analysis of Forex market

It has been a busy week for the pound, as GBP/USD has been showing significant volatility for most of the week. Currently, GBP/USD is trading at 1.3162, down 0.40% on the day.

Retail sales, PMIs head higher

On Friday, there was good news across economic sectors. Retail sales posted its third successive gain, with a reading of 3.6%. This beat the estimate of 2.0%. The Services PMI showed a strong increase in business activity in July. as the index climbed to 60.1, up from 56.5 in June. This points to strong expansion. The Manufacturing PMI improved to 55.3, up from 54.0 beforehand. These solid numbers have raised hopes that the economic recovery is finding its feet.

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British inflation levels moved higher in July. Consumer inflation climbed to 1.0%, up from 0.6% beforehand. The core reading also pointed higher, rising from 1.4% to 1.8%. Both releases beat expectations. Higher inflation is a sign of stronger economic activity. On Friday, there was good news across economic sectors.

GBP/USD Technical

GBP/USD is showing significant volatility on Friday. The pair posted strong gains in the Asian session but then reversed directions. The downward trend has continued in the European session

  • 1.3152 is a weak resistance line. Above, there is resistance at 1.3216
  • 1.3113 is under pressure in support. The next support line is 1.3009, which is protecting the symbolic 1.3000 level
  • The 10-day MA has been under downward pressure all week. If this line breaks, it would be a bearish signal for the pair