GBP/USD slides under 1.3800, strikes new three-week low as market sentiment remains sour

• GBP/USD hits a new three-week low at 1.3733.
• UK’s unemployment rate improves, market reaction was null.
• US Retail sales decline, yet safe-haven flows benefit the greenback.

The GBP/USD pair trends lower for the day at 1.3741, down 0.75% However, price is modestly up after hitting new lows for the week at 1.3733.

Market sentiment is in a risk-off mood. Afghanistan conflict keeps on weighing on sentiment, as well as China’s highest regulations, regarding Internet companies.

The UK’s economy is improving. Earlier in the day, the ONS released the unemployment numbers which were modestly better than foreseen. The ILO Unemployment Rate was 4.7% down 0.1% versus the 4.8% expected by the market. In regards to the US docket, the retail sales numbers diminished to -1.1% versus a -0.3% forecasted by economists. 

Later in the day, at 13:00 ET, Fed’s Chairman Powell will host a Conversation at the Fed Town Hall in an online event. You can watch the event here.

GBP/USD technical outlook

The cable is at 1.3741. The moving averages are above the current market price, with the 50-day moving average in between the 100 and the 200-DMA, respectively.  While the price crossed under the 200-DMA, the pair could be heading towards lower prices. The price reached near July’s 2 low around 1.3731 and bounced back. RSI is 40.70 and remains slightly lower, while the Average True Range (ATR) is 82 pips slightly up.

Resistance: 1.3784 (200-DMA), 1.3800, 1.3873 (50-DMA).

Support: 1.3731 (July 2 low), 1.3700, 1.3600.