The GBP/USD pair remains sluggish, with recovery advances restricted around the monthly high.
UK shops announce record second-quarter growth, while NI unionists express dissatisfaction with post-Brexit trade hurdles.
Even though activity limitations will be lifted on July 19, UK Prime Minister Boris Johnson urges prudence.
The primary catalysts are Covid updates and US CPI.
During the first Asian session on Tuesday, the GBP/USD fades the late Monday rally around 1.3839 around 1.3880. As a result, the cable pair struggles to find a clear direction as bulls and bears compete for mixed signals. While solid UK retail sales and prospects of re-engaging buyers are encouraging, Prime Minister Boris Johnson’s cautionary words and Brexit problems have been teasing the pair lately recently.
According to Reuters, sales in the second quarter of 2021 were 28.4% more than a year ago and 10.4% higher than two years ago, according to the latest British Retail Consortium (BRC) figures. The increase was the greatest year-over-year since the BRC’s records began in 1995, according to the news. According to Reuters, “Spending at pubs and bars surged by the most since September 2020 owing to warm weather and sporting events,” according to UK’s Barclaycard.
Alternatively, coronavirus worries have been growing in recent months, even as regulators maintain their stance on the July 19 unlock deadline. Following the lifting of limitations, UK Prime Minister Boris Johnson recently stated that life cannot return to normal. The dread of 100,000 cases in the summer has been putting the optimists to the test recently.
The parade by hundreds of Orange Order members from Northern Ireland (NI) on July 12 was also unfavorable for GBP/USD speculators. “Due to Covid-19 fears, this year’s Twelfth of July parades were smaller and more localized than usual. Orangemen also burned Irish flags on bonfires in protest of post-Brexit trade arrangements “The Daily Mail in the United Kingdom reported on this.
A light schedule keeps markets sluggish elsewhere, but the coronavirus (COVID-19) issues put market optimism to the test at the conclusion of Q2 2021.
In light of this, Wall Street benchmarks hit new highs on Monday, but S&P 500 Futures were down slightly by press time.
Following that, the June Consumer Price Index (CPI) for the United States will be crucial ahead of Fed Chair Jerome Powell’s testimony. Above all, it’s crucial to keep an eye on covid issues.
Read: June US Consumer Price Index Predictions: Has inflation reached its apex?
GBP/USD sellers are aiming for the monthly low of 1.3731 if a clear breach beyond the 100-day EMA, which is around 1.3895./n
