GBP/USD refreshes monthly low around 1.1900 ahead of UK Retail Sales

• GBP/USD drops to the fresh low in one month during three-day downtrend.
• UK Consumer Sentiment slumped to the record low in August.
• US dollar cheers rush to risk safety, firmer data and Fedspeak to refresh monthly peak.
• UK Retail Sales for July will be eyed closely after recently downbeat British data.

GBP/USD takes offers to renew its monthly low at 1.1905 during Friday’s Asian session, down for the third consecutive day amid pessimism concerning the UK’s economy, as well as hawkish Fedspeak and upbeat US data.

That said, the market’s latest move in favor of the US dollar could be linked to the increased anxiety over the Russia-Ukraine and the US-China tension as Bloomberg reported that Chinese President Xi Jinping and Russian President Vladimir Putin plan to attend a Group of 20 Summit to be held in Bali later this year, per Indonesian President Joko Widodo. The news also mentioned that it was the first time the leader of the world’s fourth-most populous nation confirmed both of them were planning to show up at the November summit.

Elsewhere, 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.

Earlier in the week, Britain reported unimpressive job numbers and firmer inflation data but couldn’t help the GBP/USD amid strong US economics and hawkish Fedspeak favored the pair bears.

That said, Philadelphia Fed Manufacturing Survey rallied to 6.2 for August versus -5 expected and -12.3 prior while the weekly Initial Jobless Claims dropped to 250K, below 265K market consensus and 252K revised prior.

Following the upbeat data, San Francisco Fed President Mary Daly mentioned that the (Fed) will continue to raise the rates to "right-size it." The policymaker added that either 50 basis points or a 75 basis points hike would be appropriate while signaling the move for the September rate decision. However, Minneapolis Federal Reserve Neel Kashkari mentioned that, per Reuters, he does not believe the county is currently in a recession. Further, the all-time hawk St. Louis Fed President James Bullard said he is leaning towards another 75 bps rate hike in September. “Trading in futures contracts tied to the Fed's policy rate suggested investors see that rate rising to a range of 3.50%-3.75% by March of next year, but then starting to fall a few months later,” said Reuters. That said, the current range of the Fed’s benchmark rates is 2.25-2.50%.

Against this backdrop, Wall Street closed mixed and exert down pressure on the S&P 500 Futures while the US 10-year Treasury yields reverse the previous day’s retreat from the monthly high to 2.891% by the press time.

Looking forward, UK Retail Sales for August, expected -3.3% YoY versus -5.8% prior, will be important for GBP/USD traders to watch for fresh directions.

Technical analysis

A downward sloping trend line from July 29, around 1.1880, could act as the last defense of the GBP/USD buyers, a break of which could renew the 2022 low, currently around 1.1760.