#GBPUSD @ 1.19085 -imp levels: reverses the corrective pullback as firmer USD joins softer UK data.

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• GBP/USD reverses the corrective pullback as firmer USD joins softer UK data.
• UK Retail Sales dropped more than expected on YoY, details suggest positive prints.
• A record low of the UK consumer sentiment gauge, political jitters also weigh on Cable prices.
• US Treasury yields underpin US dollar’s demand amid recession woes, hawkish Fedspeak.

The pair currently trades last at 1.19085.

The previous day high was 1.208 while the previous day low was 1.1923. The daily 38.2% Fib levels comes at 1.1983, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.202, expected to provide resistance.

GBP/USD retreats towards 1.1900 after the UK’s Retail Sales data failed to impress bulls during early Friday morning in Europe. The bearish bias also takes clues from the broad US dollar amid recession woes and hawkish Fed bets.

That said, UK’s Retail Sales for July dropped to -3.4% YoY versus -3.3% expected and downwardly revised -6.1% prior. However, the details appeared to be promising but failed to underpin the GBP/USD rebound.

Also read: UK Retail Sales rebound 0.3% MoM in July vs. -0.2% expected

Previously, the UK’s GfK Consumer Sentiment Index refreshed a record-low to -44 in August from July’s reading of -41. “British households are feeling “a sense of exasperation” about the surging cost of living which has pushed consumer sentiment to its lowest since at least 1974, according to the country’s longest-running survey of household finances,” Reuters mentioned following the data release.

Elsewhere, the frontrunner for the UK Prime Minister’s (PM) post Liz Truss also tried to impress voters by stating that her government’s defining mission would be to revive the economy, per Reuters. However, the present pessimism surrounding the UK’s economic crisis and Brexit woes push market players to ignore Truss’ optimism.

It should be noted that the US Dollar Index (DXY) run-up towards refreshing the monthly peak near 107.70 also exerts downside pressure on the GBP/USD prices. The greenback gains on all fronts recently. The Sino-American tussles, fears of economic slowdown in China and Europe, as well as hawkish Fedspeak, are among the key catalysts favoring the greenback.

Amid these plays, Wall Street closed mixed and exert down pressure on the S&P 500 Futures, down 0.17% intraday at the latest. Further, the US 10-year Treasury yields reverse the previous day’s retreat from the monthly high to 2.891% by the press time.

Having witnessed the initial market reaction to the UK’s key component of the Gross Domestic Product (GDP), namely the Retail Sales for July, GBP/USD traders may witness inaction amid a light calendar. However, the market’s anxiety ahead of next week’s Fed Chair Jerome Powell’s speech at the Jackson Hole Symposium could keep the Cable pair directed towards the south.

GBP/USD bears approach a downward sloping support line from July 29, around 1.1880, before targeting 2022 low, currently around 1.1760. Recovery moves, however, remain elusive unless crossing the 21-DMA hurdle surrounding 1.2100.

Technical Levels: Supports and Resistances

GBPUSD currently trading at 1.1916 at the time of writing. Pair opened at 1.1929 and is trading with a change of -0.11% % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 1.2111, 50 SMA 1.2098, 100 SMA @ 1.2382 and 200 SMA @ 1.2884.

The previous day high was 1.208 while the previous day low was 1.1923. The daily 38.2% Fib levels comes at 1.1983, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.202, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 1.1875, 1.182, 1.1718
• Pivot resistance is noted at 1.2032, 1.2134, 1.2188

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