The pound lost some 200 pips on Thursday and the GBPUSD pair
was trading down 1.50% during the London session as traders aggressively sold
sterling after the UK Brexit minister Dominic Raab's resignation. The
Cable decline back below the 1.30 level and was trading at 1.2870 during afternoon.
Earlier in the day, the UK retail sales slumped again and
the year-on-year gauge slowed to 2.2% from 3.3% in September. Moreover, the
core indicator also decelerated notably from 3.6% to 2.7%. Weaker data also
undermined the pound.
On the other hand, the US retail sales improved notably on
the monthly basis and posted a 0.8% growth, up from -0.1% previously, while the
ex autos gauge surged to 0.7% from -0.1%. The greenback strengthened slightly
after these numbers.
Finally, the Fed's chair Jerome Powell is due to speak about
Hurricane Harvey recovery efforts at an event hosted by the Federal Reserve
Bank of Dallas in Houston.
Cable is quickly dropping toward the key support of previous
lows near 1.27 and if taken out, the long-term downtrend would be confirmed. On the
upside, the first intraday resistance is seen at 1.2920 and while it trades
below, the outlook seems bearish.
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