The Pound Sterling (GBP) losses have extended to the 1.29 area following weaker than expected UK Retail Sales data for June, Scotiabank’s chief FX strategist Shaun Osborne notes.

GBP needs to break above 1.2950 to continue rising

“Sales fell 1.2% in the month, against a consensus call for a 0.6% decline. The data have not shifted BoE rate cut expectations significantly, however, with swaps pricing still sitting on the fence (12bps priced in) for the August 1 meeting. GBP is losing a little more ground on the cross against the Euro (EUR) this morning and the cross may edge up to the mid-0.84 area before steadying.”

“Cable’s strong run higher through July so far may correct a little more in the short run. Intraday price signals suggest some demand is emerging on weakness to the 1.29 area but there is perhaps stronger technical support for the GBP in the 1.2860/80 zone. Gains back above 1.2950 resistance are needed to steady the short-term outlook for the GBP.”