GBP/USD: Three reasons for the downside bias

There are three major reasons to be going short GBP/USD ahead of a long weekend, Yohay Elam, an analyst at FXStreet, reports. UK Retail Sales missed estimates.

Key quotes

“Retail Sales plunged by 18.1% in April, worse than 16% expected and on top of minor revision. The downbeat data joins a surge of 856,500 in the Claimant Count Change – jobless claims – and a plunge in inflation to 0.8% yearly.” 

“China aims to tighten its hold on Hong Kong, legislating a security law that bypasses the city-state's elected officials. The move is angering Washington and is set to trigger protests in one of Asia's most significant financial hubs. The safe-haven US dollar is on the rise in response to the souring market mood.” 

“Andrew Bailey, Governor of the BoE, opened the door to setting sub-zero borrowing costs when he spoke to lawmakers earlier this week. His views contrast those of the Fed. That divergence on interest rates is weighing on GBP/USD.”