Key Points
- British Pound continued to trade down versus the US Dollar, and even moved close to the 1.3100 levels.
- The GBPUSD pair is currently attempting a recovery, and broke a bearish trend line formed on the hourly chart.
- In the UK, the CBI Distributive Trades Survey was released by the Confederation of British Industry.
- The outcome was negative, as there was a decline from the last reading of 7 to 4 in June 2016.
Technical Analysis
The British pound collapsed versus the US Dollar, and traded towards the 1.3100 level. The GBPUSD pair is consolidating as of this analysis is written, and slowing moving higher. It also broke a bearish trend line formed on the hourly chart.
However, on the upside, the GBPUSD pair faces a major resistance near the 50 hourly simple moving average, which is near the 38.2% Fib retracement level of the last drop from the 1.3980 high to 1.3116 low.
On the downside, the 1.3250 level can be considered as a support area.
UK CBI Distributive Trades Survey
In the UK today, the CBI Distributive Trades Survey, which is an indicator of short-term trends in the UK retail and wholesale distribution sector was released by the Confederation of British Industry. The market was not expecting a decline in June 2016 from the last reading of 7. However, the result was negative, as the CBI Distributive Trades Survey came in at 4.
The report highlighted that the “Retail sales reported weak growth in the year to June, beating expectations of a modest fall and lifting sales slightly above average for the time of year, according to the CBI latest monthly Distributive Trades Survey“.
In short, the GBPUSD pair may recover some ground, but the overall trend remains bearish.
