GBP/USD retreats as volatility continues

It has been an unusually busy week for the pound, as GBP/USD has been showing significant volatility for most of the week. Currently, GBP/USD is trading at 1.3162, down 0.40% on the day.

British Retail sales, PMIs head higher

On Friday, there was good news across economic sectors in the UK. Retail sales posted its third successive gain, with a reading of 3.6%. This beat the estimate of 2.0%. The Services PMI showed a strong increase in business activity in July. as the index climbed to 60.1, up from 56.5 in June. This points to strong expansion. The Manufacturing PMI improved to 55.3, up from 54.0 beforehand. These solid numbers have raised hopes that the economic recovery is finding its feet.

British inflation levels moved higher in July. Consumer inflation climbed to 1.0%, up from 0.6% beforehand. The core reading also pointed higher, rising from 1.4% to 1.8%. Both releases beat expectations. Higher inflation is a sign of stronger economic activity. On Friday, there was good news across economic sectors.

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GBP/USD Technical

GBP/USD is showing significant volatility on Friday. The pair posted strong gains in the Asian session but then reversed directions. The downward trend has continued in the European session

  • 1.3152 is a weak resistance line. Above, there is resistance at 1.3216
  • 1.3113 is under pressure in support. The next support line is 1.3009, which is protecting the symbolic 1.3000 level
  • The 10-day MA has been under downward pressure all week. If this line breaks, it would be a bearish signal for the pair

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Kenny Fisher

Kenny Fisher

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.