Sterling at 1.3000 after a weaker-than-expected retail sales in the UK

The GBP/USD is trading down after the news of a weaker than expected retail sales in June in the United Kingdom. The Sterling is testing now the 1.3000 level.

Retail sales in the United Kingdom declined 0.5% between May and June, an unexpected drop as the market was waiting for an increase of 0.4%. The drop is more significant as an increase of 1.4% was reported in May.

National Statistics says: “The decline of 0.5% in June 2018, when compared with the previous month, also followed two months of strong growth in April and May 2018.”

Year over year, retail sales in the United Kingdom rose 2.9% in June, weaker than the 3.9% growth expected by market and well below the 4.1% posted in May.

However, according to National Statistics, “in the three months to June 2018, the quantity bought in retail sales increased by 2.1%; the largest increase since February 2015, with growth across all main sectors.”

Excluding fuel, retail sales were 0.6% down in June, unexpected as the market waited for a monthly increase of 0.3% and a number well below of the 1.4% posted in May.

Interannual retail sales excluding fuel rose 3.0% in June, a slowdown from the 4.5% increase posted on May and far from expectations of a 3.7% rise.

GBP/USD trades positive for the third day

GBPUSD daily chart July 19

GBPUSD daily chart July 19

In forex, the British pound is trading negative for the third day in a row as investors are selling the pound amid weak data. In the last three days, the GBP/USD lost 2%.

Currently, the pound is testing the 1.3000 area after falling 0.50% so far today. Technical conditions suggest more bearishness in the short and middle term.

Moving averages are neutral, and the RSI and MACD are pointing to the south.

In terms of levels, if the pair breaks below the 1.3000, it will not rest until the 1.2800, then, the 1.2600. To the upside, the cross needs to keep the 1.3000 area and a close above the 1.3050 level. Then, it will find the next selling areas at 1.3190, 1.3290 and 1.3400.

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