The GBP/USD pair is experiencing a significant drop, heading towards 1.2650. This comes in the wake of an unexpectedly sharp decline in UK Retail Sales data for December. The pair is also being impacted by a halt in the decline of the US Dollar, as overall market sentiment remains subdued ahead of key US data and Federal Reserve commentary.
GBP/USD Chart
The British Pound to US Dollar (GBP/USD) exchange rate is predicted to face a downturn in the intraday market, according to recent analyses and forecasts. The current recommendation for the asset stands at “SELL”, with an entry price (pivot) set at 1.2715.
Analysts forecast a bearish trend for the currency pair, with target and take profit levels identified at 1.2650 and 1.2635 respectively. As per these predictions, traders should be prepared to risk no more than 2% per trade.
The RSI for the GBP/USD pair indicates a downward momentum, providing further impetus for the “SELL” recommendation.
December 2023 UK Retail Sales Take a Dive
The retail sector experienced a significant downturn in December 2023, with sales volumes plunging by 3.2%, a stark contrast to the 1.4% rise witnessed in November 2023 (revised up from an initial 1.3% increase). This fall, the most substantial since January 2021, was primarily due to the impact of COVID-19 restrictions on the retail landscape.
Examining the quarterly performance, sales volumes recorded a 0.9% drop in the last three months of 2023, as compared to the preceding three-month period.
In terms of specific categories, non-food store sales volumes decreased by 3.9% in December 2023, following a 2.7% rise in November 2023, which was spurred by Black Friday sales and extensive discounting.
Food store sales volumes also dipped by 3.1% in December 2023, down from a 1.1% increase seen in November 2023.
Non-store retailing, which primarily includes online retailers, saw sales volumes decline by 2.1% in December 2023, succeeding a 1.1% drop in November 2023.
Automotive fuel sales volumes also registered a dip, falling by 1.9% in December 2023 after a 0.8% increase in November 2023.
On a year-on-year basis, sales volumes dropped by 2.8% in 2023, marking the lowest level since 2018.
| Retail Category | Change in Sales Volumes – December 2023 (%) | Change in Sales Volumes – November 2023 (%) |
|---|---|---|
| Overall Retail | -3.2 | 1.4 (Revised up from 1.3) |
| Non-food Stores | -3.9 | 2.7 |
| Food Stores | -3.1 | 1.1 |
| Non-store Retailing | -2.1 | -1.1 |
| Automotive Fuel | -1.9 | 0.8 |
| Yearly Overall Retail | -2.8 | N/A |
EUR/USD Remains Stable Ahead of Lagarde’s Speech
In contrast, the EUR/USD pair is holding steady, lingering just below 1.0900 in European trading sessions on Friday. A slight increase in the US Dollar, coupled with US Treasury bond yields, is exerting pressure on the pair amidst a cautious market atmosphere.
EURUSD Live Chart
European Central Bank (ECB) President Christine Lagarde has refrained from countering predictions of over 150 basis points (bps) rate cuts this year. Despite this, Lagarde warned against premature optimism in the markets due to a rise in Eurozone inflation to a 2.9% YoY rate in December.
Impact of US Economic Factors on EUR/USD
Lackluster US Dollar (USD) price action has not provided any significant momentum to the EUR/USD pair as the week draws to a close. However, positive economic indicators, such as better-than-expected US Retail Sales data and a robust labor-market report, suggest a healthy economy. Hawkish comments from several Fed officials have also reduced expectations of an early interest rate cut.
Additionally, reducing chances of aggressive policy easing by the US central bank have pushed the yield on the benchmark 10-year US government bond to its highest in over five weeks, providing some support to the USD. Nevertheless, the markets are still factoring in a 50% chance of a Fed rate cut in March. This, along with stable performance within equity markets, limits the upside for the safe-haven USD and provides some support to the EUR/USD pair.
Market Participants Await Lagarde’s Commentary
Investors are now looking forward to ECB President Christine Lagarde’s comments at the World Economic Forum for some impetus. During the early North American session, traders will take cues from the US economic docket – featuring the release of the Preliminary Michigan Consumer Sentiment and Inflation Expectations, along with Existing Home Sales data.
Influential FOMC members’ speeches, along with the US bond yields and the broader risk sentiment, could drive the USD demand and produce short-term trading opportunities around the EUR/USD pair. However, spot prices remain on track to register weekly losses due to the underlying bullish tone surrounding the USD.
EUR/USD Chart
The Euro to US Dollar (EUR/USD) exchange rate is poised for gains in the intraday market, according to recent forecasts and market analyses. The recommendation for the asset currently stands at a “BUY”, with an entry price (pivot) set at 1.0860.
Forecasts suggest a bullish turn for the currency pair, with target and take profit levels identified at 1.0905 and 1.0920, respectively. As per these predictions, traders should be prepared to risk no more than 2% per trade.
The RSI for the EUR/USD pair indicates an upward momentum, providing further impetus for the “BUY” recommendation.
Crude Oil Prediction
West Texas Intermediate (WTI) Crude Oil Chart
The West Texas Intermediate (WTI) Crude Oil is expected to find intraday support around the $73.30 mark, according to recent market forecasts. The current recommendation for the asset is “BUY”, with an entry price (pivot) set at $73.30.
Analysts predict a bullish trend for WTI Crude Oil, with target and take profit levels identified at $74.70 and $75.25 respectively. As per these predictions, traders should be prepared to risk no more than 1% per trade.
This outlook is further reinforced by the next resistances which are anticipated at $74.70 and then at $75.25.
Gold Price Ascends from $2,000 Low Point: Bullish Trends Predicted Amid Global Uncertainties
The price of gold (XAU/USD) is rebounding, building on its recovery from a low near the psychological $2,000 mark, its lowest since December 13. The precious metal is gaining traction for the second consecutive day, thanks to escalating military activities in the Middle East and concerns over China’s economic stability. These factors are bolstering the appeal of gold as a safe-haven asset.
XAUUSD Chart
Forecasts suggest an upward trend for Gold in the intraday market, predicting a price of $2037.00. Analysts are recommending a “BUY” for this asset, with a pivot or entry point set at $2013.00.
The bullish trend forecast for gold sets target and take-profit levels at $2030.00 and $2037.00 respectively. Traders, based on these predictions, are advised to risk no more than 1% per trade.
This optimistic projection is driven by current global geopolitical risks prompting investors to seek refuge in gold. Furthermore, the gold price has successfully breached the $2037.50 level and settled back within the intraday bearish channel, reigniting the bearish trend scenario in the short term.
Nonetheless, it’s important to consider that while consolidation may continue, it should be limited. Thus, despite potential short-term price fluctuations, the overall trend suggests a rise in the price of gold.
BTC Price Hovers Below $42,000
Bitcoin’s price is currently lingering below the $42,000 mark. Forecasts suggest a possible rebound for the Bitcoin to US Dollar (BTC/USD) exchange rate towards $42,420 in the intraday market. The prevailing recommendation for this asset is a “BUY”, with a pivot or entry point set at $40,590.
BTCUSD Chart
Analysts predict a bullish turn for the cryptocurrency pair, with target and take profit levels identified at $42,420. As per these predictions, traders should be prepared to risk no more than 1% per trade.
This outlook is partially supported by the Relative Strength Index (RSI), which is currently below 50, indicating that the market may be oversold and a price increase could be imminent. The Moving Average Convergence Divergence (MACD) is negative but above its signal line, suggesting a mixed configuration.
Moreover, the BTC/USD price stands above its 20-period moving average (at $41,103) but below its 50-period moving average (at $41,865). This indicates a potential turning point or short-term pullback within a bigger trend.
As always, while the intraday bias for Bitcoin / Dollar is currently bullish, it’s crucial for traders to closely monitor market movements and global economic indicators as Bitcoin’s is notoriously volatile.
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