The Pound Sterling (GBP) losses have extended to the src.29 area following weaker than expected UK Retail Sales data for June, Scotiabank’s chief FX strategist Shaun Osborne notes.
GBP needs to break above src.2950 to continue rising
“Sales fell src.2% in the month, against a consensus call for a 0.6% decline. The data have not shifted BoE rate cut expectations significantly, however, with swaps pricing still sitting on the fence (src2bps priced in) for the August src meeting. GBP is losing a little more ground on the cross against the Euro (EUR) this morning and the cross may edge up to the mid-0.84 area before steadying.”
“Cable’s strong run higher through July so far may correct a little more in the short run. Intraday price signals suggest some demand is emerging on weakness to the src.29 area but there is perhaps stronger technical support for the GBP in the src.2860/80 zone. Gains back above src.2950 resistance are needed to steady the short-term outlook for the GBP.”
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