GBP/USD Outlook (14th August 2019)

The overall trend for GBP/USD is downtrend. Recently, GBP/USD tested the key level of 1.21 thrice but failed to break upwards due to the existing Brexit uncertainty. This morning, British House of Commons Speaker John Bercow said that he refuses to allow Prime Minister Boris Johnson to suspend parliament in order to secure Brexit and will go against any attempt to do so.

Earlier today, the British CPI y/y data released were better than expected. The CPI y/y data has exceeded the 2.0% inflation target while the Core CPI y/y data inched closer to the target.

• CPI y/y (Actual: 2.1%, Forecast: 1.9%, Previous: 2.0%)
  
• Core CPI y/y (Actual: 1.9%, Forecast: 1.8%, Previous: 1.8%)
  

The market responded positively to the better than forecasted data. Nonetheless, the strengthening of the British pound is expected to be short-lived due to the existing uncertainty in Brexit.

The British retail sales m/m data will be released tomorrow at 1630 (SGT).

• Retail Sales m/m (Forecast: -0.3%, Previous: 1.0%)
  

It is forecasted to perform worse than previous month’s data release. If the released data is worse than or as forecasted, we may be seeing a weakening in the British pound and GBP/USD may move further down, testing the support level of 1.20000. Currently, GBP/USD is moving away from the resistance level of 1.22000.