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GBPUSD Market Update

8/10/2022 1:59 PM

The negative British statistics puts pressure on the pound and act as a driver for the decline of the GBP/USD pair to the area of ​​1.1950 and 1.1770.

The national economy has likely entered its worst downturn since the coronavirus lockdown. According to experts, gross domestic product (GDP) for the second quarter may decline by 0.2%, which will mean a pause in the recovery from the pandemic and the beginning of a more protracted decline, which, according to the expectations of the Bank of England, will last until early 2024. However, the pound has received little support from retail sales data, with same-store retail sales up 1.6% in July after falling 1.3% a month earlier, according to data from the British Retail Consortium (BRC), while analysts had expected a sharp decline in sales by 8.4%.

In general, negative forecasts are confirmed by the technical analysis of the trading instrument. The long-term trend is downwards, and after the asset failed to consolidate above the resistance level of 1.2180, it continued to decline, the first target of which is 1.1950, and after its breakdown – 1.1770.

The medium-term trend remains upwards, and at the moment, the price is trading in a correction, the likely target of which is a test of the key trend support 1.1932–1.1896. If it holds, the probability of renewing the last week's high around ​​1.2290 will increase, and in case of a downward breakdown, the quotes will continue to fall towards the target zone 2 (1.1572–1.1536).

Resistance levels: 1.2180, 1.2385. | Support levels: 1.1950, 1.1768.

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