GBP/USD Forecast: 1.3000 Lost As Retail Aales Are The Straw That Breaks The Camel's Back, Levels To Watch

• UK Retail Sales are the straw that breaks the camel's back.
• The GBP/USD had already struggled with weak data, Brexit, and Powell's optimism. 
• The technical picture looks sensitive for Sterling.

UK Retail Sales fell by 0.5 percent in June, worse than an increase of 0.2 percent that was projected. Core sales slid by 0.6 percent, double the expected drop. The annual figures also fell short of expectations. Minor upward revisions were not enough to balance the picture.

The GBP/USD, which front-ran the publication with a small dip, fell sharply lower and dropped below 1.3000. 

More: GBP/USD Forecast: Weaker retail sales send Sterling smashing 1.3000 to the downside

The GBP/USD was already under pressure

Weak data: The annual Consumer Price Index came out at 2.4 percent, unchanged from the previous month and below 2.6 percent expected. Wednesday's publication sent the pair closer to 1.3000 and to a 10-month low. Some analysts now doubt the Bank of England will raise rates in its August 2nd meeting. The news came on top of a small rise in UK jobless claims reported on Tuesday.

Brexit woes: As the new Brexit Minister Dominic Raab meets Chief EU Negotiator Michel Barnier in Brussels, the UK Conservative Party remains torn between a majority of soft-Brexiteers and a vociferous minority of hard-Brexiteers. The lack of a majority in parliament gives the hardlines lines more power. Moreover, reports coming out of Brussels suggest that the concessions made by May in Chequers, those that are tearing the party, are unacceptable for Brussels. Concerns weigh on the pound.

Strong US Dollar: Fed Chair Jerome Powell conveyed an optimistic message on the economy. Growth is expected to rise, more people are drawn into the workforce, and inflation is on course to reach and sustain the 2 percent target. Concerns about trade remain somewhat muted in the Fed's discourse. The FOMC is set to raise rates.

GBP/USD Levels

The GBP/USD is under immense pressure. A sharp downfall may result in the pair entering oversold territory as the Relative Strength Index is close to the 30 level.

The 1.3000 level is the obvious psychological support line, followed by 1.2860 which served as support back in August 2017. The next level to watch is 1.27875, a low point also back in August and the lowest in a long time.

On the upside, 1.3050 is now resistance, followed by 1.3100 and 1.3160, lines that separated the pair's ranges recently.