The British Pound yesterday's retail sales data were much better than expected (1.6% versus 0.8% expected and -1.1% prior). The behavior of the course after the data, in form of a rapid extinguishing of the increase over 1.34, perfectly illustrates how weak sentiment prevails around the British currency. The UK GDP revision published today is another important reading, which will determine how high chances of an increase in rates in the United Kingdom are in August. Despite the first reading that came out surprisingly poorly, there is still no some room for revision up as the data were just as expected at the level of 0.1%. In addition, the contribution of individual components and, thus, the answer to doubts about the power of demand, is so far rather weak. The Business Investment index decline -0.2% while the increase of 0.2% was expected and it dropped to the yearly low of 2.0%. The Index of Services was released at the level of 0.3%, in line with expectations.

In conclusion, the dynamics of British GDP in the first quarter was confirmed at 0.1% Q/Q. and 1.2% Y/Y. GBP / USD stays around 1.3360, and the data does not contribute anything from the point of view of the Bank of England's policy outlook. Given the confusion on the political scene and the weakening position of Theresa May's cabinet, we remain negative towards the pound and expect a continuation of its downfall in the mid-term.

Let's now take a look at the GBP/USD technical picture at the H1 time frame. The initial reaction to the data release was to the downside, but now the market is not trying to break through the intraday resistance at the level of 1.3368. In a case of a successful breakout, the next technical resistance is seen at the level of 1.3391 and 1.3451. The swing low at the level of 1.3306 is now the most important support for the market.