Sterling fell on Friday, falling to session lows after strong U.S. University of Michigan consumer and one-year inflation expectations nL1N2QJ18C after initially being weakened by disappointing UK retail sales data nL8N2QJ0RS.
Sterling losses were cushioned somewhat during U.S. morning trade by profit-taking on recent GBP/USD shorts ahead of upcoming Fed and BoE meetings.
The recent resurgence in U.S. data and below-forecast UK retail sales data may temper recent hawkishness by the BoE Governor Andrew Bailey nS8N2OX08U and others, potentially pushing UK rate hike expectations further out the curve 0#FSS: and narrowing the gap with the U.S. outlook.
Sterling has been probing trendline support off of August and September lows below 1.38 for the last two days.
A close below trendline support at 1.3794 would give further momentum to bears, opening the way for a run toward September 8's low of 1.3727 and lower 30-d Bolli support by 1.3663.
Should Fed and BoE rate hike expectations converge further, GBP/USD's near 1% gain in 2021 would likely evaporate as traders target the Jan.
11 2021 low at 1.3451.
For more click on FXBUZ
GBP Chart: Click here