GBP/USD was successful Rebound From a decade low at 1.1350 and above 1.1400 around 1.1420. The weakening of the US dollar after the release of a survey report from the University of Michigan on consumer sentiment helped the currency pair recover towards the end of the trading week.
Before the release of the Consumer Sentiment Survey report from UOM, GBP/USD continued to decline to its lowest level since 1985 at 1.1350. The market environment, which was initially risk-averse, also pushed the pair down.
In addition, the British pound suffered heavy losses against its rivals due to disappointing economic data outside the UK. The UK Office for National Statistics reported that UK retail sales declined 1.6% on a monthly basis in August after rising 0.4% in July. This figure is significantly worse than the market’s forecast for a drop of only 0.5%.
After the release of a survey report on consumer sentiment from the University of Michigan at the end of the trading week, the currency pair experienced a recovery reversing the weakening of the US dollar. The US Dollar index fell 0.05% to 109.392 from the previous uptrend.
Consumer sentiment continues to improve and inflation expectations remain high. According to the University of Michigan, the initial estimate from the Consumer Sentiment Survey rose to 59.5 from a previous reading of 58.2. From the results of the UOM survey, consumers see an increase in inflation to 4.6% over the next year, the lowest inflation forecast in a year. Five-year inflation forecast also fell to 2.9% from August’s figure of 3.1%
support and resistance
The nearest “support” is waiting at 1.1450, which if successfully crossed will continue to 1.1400 and then to 1.1350. The nearest “resistance” is waiting at 1.1500, which if successfully crossed will continue to 1.1550 and then to 1.1600.