The UK retail sales data earlier may be better-than-expected but it hardly means much on a day like this. The broader focus in markets is on the dollar and Fed outlook and that is telling the story today. The greenback is running hot amid a surge higher in bond yields and that is weighing on GBP/USD, which is down 0.6% to 1.1919 currently.
Upon the break below 1.2000 yesterday, it is now the confluence of the key daily moving averages to provide the next line of support for the pair. The 100 (red line) and 200-day (blue line) moving averages are seen at 1.1899 and 1.1937 respectively and they will act as a key support region as sellers look for a downside break.
Adding to that layer of support will be the 30 November and January lows around the region of 1.1840 to 1.1900. However, a break below the key daily moving averages will turn the bias to be more bearish and amid a broader bid in the dollar, it may be tough to stem the bleeding.
Beyond the levels highlighted above, GBP/USD could be gunning for a squeeze lower towards 1.1500 next should markets continue to cower in fear of a more hawkish and aggressive Fed in the months ahead.
