The pound has dropped to its lowest level versus the dollar since July 2013 as the greenback surges in the wake of the European Central Bank’s quantitative easing announcement. The demise of the pound has been dollar-driven, and the downward trend that GBP/USD has been in since July has accelerated as the market seeks the security of a safe haven currency.
The UK will release the retail sales for December at 9.30am (London time) — the consensus is for a decline of 0.6%. The Christmas period is the busiest in the year for the retail calendar, and should estimates be missed it will add to sterling’s woes.
The pound is currently trading below $1.50, and if resistance is held at this metric, $1.49 will be the target. The relative strength indicator on the daily chart is in oversold territory leaving potential for a pullback, while the 50-hour moving average of $1.51 will be in sight.