GBP/USD trades at monthly low as retail sales unexpectedly slump
GBP/USD licking its wounds after the biggest daily fall since June as COVID cases rise and AstraZeneca & Pfizer vaccines are found to be less effective versus delta strain.
UK retail sales unexpectedly slumped in July to -2.4% MoM versus 0.3% gain forecast. Sales declined as covid cases & Pingdom kept people at home.
UK consumer confidence ticked lower in August to -8, from -7 the post pandemic high.
US Dollar steady after reaching yearly highs on safe haven inflows & hawkish FOMC minutes earlier in the week.
Where next for GBP/USD?
GBP/USD fell below its 200 sma on the daily chart and broke through a key support at 1.3660 keeping the seller’s hopeful. The RSI is pointing lower and in negative territory supportive further downside.
A breakthrough support at 1.3570 could see the pair reach fresh year to date lows.
On the flip side any move higher would need to retake horizontal resistance at 1.3660 and 1.3700 before looking to retake the 200 sma at 1.3795.
DAX under pressure, finds support at 50 sma
German Dax is heading lower as European indices trade in a mixed fashion at the end of the week, a week which has seen investors turn more risk adverse.
Rising covid cases, concerns over global growth and China’s regulatory crackdown have weighed on demand for riskier assets.
Germany’s factory prices soared 1.9% MoM in July, up 10.4% YoY – an elevated level which could well attract the attention of the ECB.
Where next for the Dax?
After hitting an all time high at 16031 last week, the index has been trending lower. It found support yesterday on the 50 sma on the daily chart which is keeping the bulls hopeful. However, a bearish crossover on the MACD suggests that there could be more downside the come.
Any move lower would need to close below the 50 sma at 15655 in order to head towards the 100 sma 15500. It would take a move below 15245 to negate the near term up trend and see the sellers gain traction.