GBP/USD drops further to 1.2880 ahead of US retail sales

The sell-off in GBP/USD gained further momentum, following the release of below estimates UK CPI figures, now pushing the rate below 1.29 handle

GBP/USD awaits US retail sales for fresh impetus

Heading into the mid-European session, the spot extends its downward spiral, fuelled by softer-than expected UK CPI data, which raised fresh doubts on the BOE’s interest rates outlook. UK July CPI: A miss on expectations across all indicators

Moreover, renewed Brexit jitters amid latest reports of the UK’s latest Brexit offer for interim customs deal with the EU, while comments from the UK’s Brexit Minister David Davis on the Brexit negotiations, continue to weigh down on the sentiment around the pound.

Furthermore, renewed weakness in oil prices dragged the European equities lower, and dampened demand for the risk currency GBP. Meanwhile, expectations of a rebound in the US retail sales data add to the persistent broad USD strength, knocking-off GBP/USD lower.

GBP/USD levels to consider             

Valeria Bednarik, Chief Analyst at FXStreet noted: “A downward extension below the daily low should lead to a continued decline, initially towards 1.2870 and later to the 1.2830 price zone. Recoveries, on the other hand, will likely meet selling interest around 1.2965, the immediate resistance, although very disappointing US data can push it up to the 1.3000 level, where the next round of sellers await.”