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A disappointing data release has dragged Cable to its monthly lows.

Will GBP/USD head to its multi-decade lows?

Before moving on, ICYMI, yesterday’s watchlist looked at USD/JPY’s ascending triangle situation ahead of the U.S. PPI release. Be sure to check out if it’s still a valid play!

And now for the headlines that rocked the markets in the last trading sessions:

Fresh Market Headlines & Economic Data:

BOE Survey: UK public inflation expectations at record high for 2023

U.S. retail sales unexpectedly jump by 0.3% vs. -0.1% expected, -0.4% in July

U.S. core retail sales down by 0.3% vs. no growth expected

Declines in new orders and shipments dragged the U.S. Philly fed index to a surprising negative reading (-9.9) in September

U.S. initial jobless claims dip to 213K, marking its fifth straight week of decline

U.S. industrial production contracts by 0.2% (vs. 0.2% uptick expected) on lower utilities output

New orders helped bump BusinessNZ’s manufacturing PMI from 53.5 to 54.9 (the highest activity level since July 2021) in August

China’s retail sales grew by 5.4% from a year ago in August vs. 3.5% increase expected

China’s industrial production saw 4.2% annual growth in August, outpacing 3.8% estimates

China’s fixed asset investment increased by 5.8% in the first eight months of 2022, above 5.5% growth expectations

China’s real estate investment down by another 7.4% from a year ago in August following a 6.4% slide in July

RBA Gov. Lowe “not surprised” if home prices see double-digit declines

Lowe: RBA getting closer to 2.5% – 3.5% normal rates

U.K. retail sales clocked in at -1.6% in August, the biggest decline so far this year

Upcoming Potential Catalysts on the Forex Economic Calendar:

Italy’s trade balance at 8:00 am GMT
U.S. preliminary UoM consumer sentiment at 2:00 pm GMT

Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️

What to Watch: GBP/USD

GBP/USD 1-hour Forex Chart

GBP/USD 1-hour Forex Chart

Traders are droppin’ pounds and not one of them is weight-related!

A report printed earlier showed the U.K. retail sales declining by 1.6% in August, which is not only slower than July’s 0.4% uptick but also marks the biggest decline so far this year.

The report came at a time when European traders are catching up to the U.S. worrying even more about the Fed’s interest rate hikes. See, a U.S. data dump in the previous trading session pointed to the Fed raising its rates by at least 75 basis points next week.

The increased dollar demand and then today’s pound selling has dragged GBP/USD closer to the 1.1400 psychological handle.

If the pair breaches September’s lows, then GBP/USD could fall to lows not seen since March 1985. That’s about the time Mikhail Gorbachev replaced Konstantin Chernenko as Soviet leader!

I wouldn’t discount a short-term bounce, however.

We could see an end-of-week profit-taking among traders who would like to stay in the sidelines ahead of the Fed’s event next week.

Keep close tabs on this one, forex friends!