GBP/USD has reversed directions on Friday. and has recorded slight losses. In the North American session, the pair is trading at 1.2493, down 0.23% on the day.
Soft Consumer Data Raises Concerns
The British pound has held its own this week, but investors are seeing red after soft August consumer data was released earlier in the week. Consumer inflation slowed to 1.7% in August, its lowest level since December 2016. This was followed by a soft retail sales report, which declined by 0.2%. With the Brexit deadline looming and the U.K. and the EU at odds over their future relationship, consumers are nervous and could hold tight to the purse strings, which would be bad news for the economy and the British pound.
GBP/USD started Friday above the 1.2510, but was unable to consolidate and has fallen back into 1.24 territory. The pair could take another stab at breaking above this line, but we can expect it to remain relevant early next week. On the downside, there is support at 1.2420, which was tested earlier in the week. 1.2380 has strengthened in support, with the pound moving to higher ground.
GBPUSD 4-Hour Chart
USD/CAD has reversed directions on Friday and posted slight gains. Early, in the North American session, the pair is trading at 1.3283, up 0.17% on the day.
Soft Core Retail Sales Weighs on Loonie
Canada wrapped up the week with key consumer spending numbers. Retail sales in July improved to 0.4%, matching the forecast and marking a 4-month high. Core retail sales could not keep up and declined 0.1%, shy of the estimate of +0.2%. This is the second decline in three months, which could raise concerns among investors. The Canadian dollar has responded to these releases with slight losses in the North American session.
USD/CAD has tested the 1.3282 line on Friday but this line remains fluid. The pair has failed to consolidate above this level all week, a testament to its resilience as a resistance line. The next resistance line is at 1.3320, which has held since September 4. On the downside, there is support at the round number of 1.3200.
The Mexican peso is trading sideways in Friday trade. In the North American session, USD/MXN is trading at 19.42, down 0.01% on the day.
Peso Steady after Federal Reserve Cut
The Mexican peso showed little reaction to the Federal Reserve rate cut. Investor risk appetite remained solid after Fed Chair Powell said that domestic economic conditions were “favorable” and that the cut was an insurance policy in case the economy loses steam.
The Mexican peso has been rangebound throughout the week. The resistance line of 19.45 remains weak but has proven to be resilient, as USD/MXN is clearly having difficulty breaking above this level. Will the pair test this line in the North American session? The next resistance line is at 19.70, which is also the 20-day simple moving average (SMA) that should limit upside movement. On the downside, there is support at 0.1920, which has held since August 1.
This article was originally posted on FX Empire
More From FXEMPIRE:
- Crude Oil Weekly Price Forecast – Crude oil markets gap to kick off the week
- Gold Weekly Price Forecast – Gold markets continue to look for support
- Crude Oil Price Forecast – Crude oil markets continue to grind
- GBP/USD Price Forecast – British pound rolls over
- GBP/JPY Weekly Price Forecast – British pound shows signs of exhaustion
- S&P 500 Price Forecast – Stock markets continue to test highs