Market news
26.05.2023, 01:06

GBP/USD Price Analysis: Bears attack adjacent support near 1.2300, UK Retail Sales eyed

  • GBP/USD stays bearish at the lowest levels in seven weeks, down for the fourth consecutive day.
  • UK Retail Sales growth is expected to improve in April, suggesting hardships for Cable bears amid nearly oversold RSI.
  • Two-week-old falling support line, 100-DMA restrict immediate downside of the Pound Sterling.
  • Recovery remains elusive below 50-DMA, 1.2370 can tame corrective bounce.

GBP/USD remains on the back foot at a two-month bottom as sellers prod a short-term support line ahead of the key UK Retail Sales data on early Friday. In doing so, the Pound Sterling struggles to extend the three-day losing streak around 1.2320-15 by the press time.

That said, the UK Retail Sales for April, expected 0.3% MoM versus -0.9% prior, can join the aforementioned two-week-old support line and nearly oversold RSI (14) line to challenge the Cable pair sellers.

However, a downward-sloping resistance line from May 10, close to 1.2370 at the latest, could challenge the GBP/USD pair’s further recovery.

Even if the Cable pair remains firmer past 1.2370, the 50-DMA hurdle of around 1.2435 may act as the last defense of the bears before giving control to the bulls.

On the flip side, a clear break of the immediate support line near 1.2300 could aim for the 100-DMA support of 1.2285.

Following that, a horizontal area comprising levels marked since March 13 and the 61.8% Fibonacci retracement of its March-May upside, respectively around 1.2190-85 and 1.2140 in that order, could challenge the GBP/USD bears.

GBP/USD: Daily chart

Trend: Limited downside expected


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