The GBP/USD pair closed lower on Thursday, ending a four-day winning streak and touching a low below 1.2680 in the early European session on Friday. However, it recovered to the 1.2700 area later in the day. The UK’s Office for National Statistics reported a decline of 2.3% in Retail Sales for April, worse than the market expectation of a 0.4% contraction. This disappointing data has prevented Pound Sterling from gaining strength against other currencies.
Despite climbing to a two-month-high above 1.2750 on Wednesday after stronger than expected UK inflation data for April, GBP/USD lost momentum and closed the day little changed. The pair trades in a tight range above 1.2700 on Thursday. The minutes of the Federal Reserve’s April meeting showed some policymakers willing to reconsider rate increases if necessary, which helped the US Dollar gain strength against other currencies.
The GBP/USD pair is struggling to remain bullish after mixed UK PMI data. While it climbed to above 1.2750 on Wednesday, it lost momentum and closed little changed. The Federal Reserve’s minutes from April showed some policymakers willing to reconsider rate increases if necessary, leading to US Dollar strength. Pound Sterling is finding it difficult to gather strength against the US Dollar, despite stronger than expected UK inflation data for April.
The Pound Sterling could continue to struggle against the US Dollar if it remains below the 1.2700 level. The disappointing UK Retail Sales data for April, which showed a decline of 2.3%, has prevented the Pound from gaining strength. The Federal Reserve’s minutes from April, showing a willingness to reconsider rate increases if necessary, have boosted the US Dollar, further hindering the Pound Sterling’s ability to rally.
Looking ahead, the GBP/USD pair may face further challenges if it fails to break above the 1.2700 level. The mixed UK PMI data and the Federal Reserve’s willingness to reconsider rate increases are likely to keep the US Dollar strong. Pound Sterling may struggle to gain strength against the US Dollar in the near term, especially if economic data from the UK continues to disappoint.
In conclusion, the GBP/USD pair is facing resistance below the 1.2700 level, with the Pound Sterling struggling to remain bullish against the US Dollar. The disappointing UK economic data, coupled with the Federal Reserve’s willingness to reconsider rate increases, has prevented the Pound from gaining strength. Moving forward, Pound Sterling may continue to face challenges against the US Dollar if it fails to break above the 1.2700 level. Economic data from both countries will be crucial in determining the direction of the GBP/USD pair in the coming days.
