Disappointing UK Retail Sales Renew Rate Cut Speculation: GBP/USD and FTSE 100 Outlook

Market Overview

The GBP/USD faced mild pressure today, trading near 1.21820 as mixed UK economic data dampened sentiment. While GDP grew by 0.1% in November, industrial production fell by 0.4%, reflecting ongoing economic challenges. Retail sales also dropped 0.3%, falling short of the 0.4% forecast.

The disappointing data renewed speculation of potential rate cuts by the Bank of England, adding uncertainty to the currency pair’s outlook.

Meanwhile, the FTSE 100 climbed 0.45%, buoyed by robust performances in mining stocks and positive sentiment from China’s Q4 GDP growth reaching 5%. Despite weaker UK retail figures, the index benefited from investor optimism around interest rate cuts.

The FTSE is eyeing record highs, bolstered by global recovery hopes and corporate updates, including AstraZeneca’s FDA approval for a key cancer treatment. Investors remain cautious, monitoring upcoming UK economic indicators for further direction.

GBP/USD Technical Analysis

The GBP/USD pair is trading at $1.21820, down 0.43%, reflecting continued bearish momentum as it stays below the key pivot level of $1.23056. The immediate resistance at $1.24402 aligns with a downward trendline, reinforcing selling pressure.

Further resistance is seen at $1.25827. On the downside, support lies at $1.20987, with deeper levels at $1.19575 signaling potential for extended losses. The 50-day EMA at $1.22742 underscores short-term resistance, while the 200-day EMA at $1.24905 confirms the broader bearish structure.

A sustained move below $1.23056 could open the path to lower supports, while a break above the pivot may signal renewed bullish interest.

FTSE – Technical Analysis

The FTSE 100 is trading at 8456.7, up 0.45%, reflecting continued bullish momentum as it stays above the pivot point at 8414.7. Immediate resistance is located at 8507.7, with further upside potential toward 8557.2 if the rally holds.

On the downside, support is positioned at 8363.7, followed by deeper levels at 8327.2. The 50-day EMA at 8272.1 reinforces the bullish short-term sentiment, while the 200-day EMA at 8230.3 highlights a broader upward trend.

A sustained move above 8414.7 could attract further buying interest, targeting higher resistance levels, while a break below the pivot may signal a bearish correction. Traders should watch the resistance at 8507.7 for signs of extended gains.