GBP Slides As Retail Sales Fall Again

Retail Sales Fall AgainThe British Pound is coming under fresh selling pressure today on the back of the latest UK economic data released this morning. Retail sales were seen falling in negative territory again last month, printing -0.3%, well below the 0.5% the market was looking for. On the back of the heavy fall in inflation seen over the same month and the 0% preliminary Q3 GDP reading, the focus is growing sharper on BOE rate-cut expectations.Shifting BOE ViewAt the last meeting, the BOE warned that there was stull more work to do on inflation and signalled that further tightening would likely be needed. However, on the back of the more than 2% drop in headline CPI YoY last month, traders now sense that the BOE tightening cycle is complete and have begun pricing in rate cuts over H1 2024.Where to Sell GBP?With UK recession risks once again in focus and traders now looking to gage the first expected BOE rate cut next year, GBP looks vulnerable to further downside near-term. Looking ahead, any incoming data misses should help drive heavier selling as will any dovish BOE commentary. Given the softer US Dollar we’re seeing currently, GBP looks a better short on the crosses where improved risk appetite is driving commodity currencies higher.Technical ViewsGBPAUDThe breakdown below the bull channel has yet to follow through. Price is currently being underpinned by the 1.8980 level and is caught in a range between that support and resistance at 1.9333. Current price action can be viewed as a head and shoulders pattern, however, suggesting room for a deeper move lower. Below 1.8980, bears can target 1.68 as the first objective.