The GBP/USD currency pair failed to stop its 3-day losing streak and dropped to 1.2212 and represented 0.09% losses on the day as the BOE Governor Andrew Bailey’s recent indication about negative rates weighed on the Cable. Moreover, the reason for the pair declines could also be attributed to the broad-based U.S. dollar strength in the wake of intensifying US-China tussle. The GBP/USD is trading at 1.2220 and consolidating in the range between 1.2201 and 1.2239. However, the traders will be cautious to place any strong position ahead of the U.K. Retail Sales data.
At the data front, the U.K. Retail Sales data is scheduled to release at 06:00 GMT on the day, which is expected to drop 16% MoM in April, following -5.1% seen in March. Total retail sales are expected to drop 22.2% during the entire year in the reported month, down from -5.8% booked previously.
In the meantime, core retail sales are also expected to represent the coronavirus (COVID-19) impact with -15.0% MoM and -18.2% YoY figures. However, the data is expected to spread disappointment as the survey period is linked to the virus-led lockdown. Generally, high figures will be seen as positive or bullish for the GBP, while a low reading will be seen as negative or bearish.
The GBP/USD continues to trade within the same technical levels, which we discussed a day before. The Cable is facing resistance around 1.2269 level, and it continues to develop doji and bearish engulfing candles below 1.2269 zones, which has driven a bearish retracement in the Cable. On the lower side, the Sterling may find support against the U.S. dollar around 1.2170 level. The MACD and 50 EMA are supporting selling bias in the pair.
Entry Price – Sell 1.22073
Stop Loss – 1.22473
Take Profit – 1.21573
Risk to Reward – 1.25
Profit & Loss Per Standard Lot = -$400/ +$500
Profit & Loss Per Micro Lot = -$40/ +$50