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GBP the Poorest Performer for a Second Session

FOREX
  • For a second consecutive session, GBP is the poorest performer in G10 as GDP came in softer than expectations, confirming that the UK has entered a technical recession. GBP/USD has re-entered the bottom half of the '24 range, trading either side of the 200-dma at 1.2565. The bear trigger sits just below at 1.2519/00, a break below which open further losses. This turns attention to Friday's retail sales release and June meeting BoE pricing, for which 17bps of rate cuts are currently priced.
  • GBP/JPY price action over the past two days has seen the cross reverse off 190.08 - the near ten-year high posted this week. The two-day move puts prices within range of 187.31 as the next support, and a sentiment shift for the BoE and renewed JPY intervention concerns could accelerate any pullback.
  • Bucking the recent trend, CHF is a touch firmer, helping USD/CHF edge off the recovery high posted this week at 0.8886. The pair has dipped back below the 200-dma level, with next support seen into 0.8789 and 0.8807.
  • The US retail sales release takes focus going forward, alongside weekly jobless claims data as well as import/export price indices. ECB's Lane and Nagel are set to speak as well as BoE's Greene and Mann later in the session. Fed's Waller follows, speaking on the reserve status of the US dollar.
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