The Great Britain pound was falling even as UK macroeconomic data was mostly good. Yesterday’s data about high street sales was not that encouraging though and it might have contributed to the weakness of the sterling.
Confederation of British Industry released its Distributive Trades Survey for October that showed a net balance of +2 percent, well below expected +31 percent. Barry Williams, Asda Chief Merchandising Officer for Food, and Chair of the CBI Distributive Trades Survey Panel, said:
Although the high street recovery stalled this month, there is optimism that it was just a blip on the previous run of three months’ growth. Retailers expect sales to pick up next month and are upping orders with their suppliers.
So why is the sterling falling even as fundamentals are good? One could say that the rally was excessive and should have paused, gathering strength for another thrust up. Yet, looking at the daily chart of GBP/USD, technical analysts that a double-top pattern is forming and it looks dangerous to Britain’s currency.
GBP/USD dropped from 1.6138 to 1.6093 as of 1:01 GMT today. GBP/JPY declined from 157.61 to 156.87 and EUR/GBP advanced from 0.8537 to 0.8562.
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