Ethereum and Ripple experienced a notable rebound this week after retesting key support levels, suggesting a potential rally in the near future. However, these digital currencies face challenges from the unexpected decline in the United Kingdom's Retail Sales for December. This decline has introduced fresh selling pressure on the GBP/USD, which fell below 1.2200 during Friday's European trading session.
As the market navigates through these developments, it is important to note that neither the author nor FXStreet is a registered investment advisor, and this article should not be considered as investment advice. The unexpected drop in UK Retail Sales has further complicated the currency markets, as expectations of additional rate cuts by the European Central Bank continue to weigh down the Euro. Consequently, EUR/USD weakened to trade near 1.0300 in the early European session on Friday.
Amidst these shifts, the US Dollar has found support as market sentiment remains cautiously optimistic. Resurgent demand for the US Dollar is exerting downward pressure on currency pairs such as GBP/USD and EUR/USD. Traders are also eagerly awaiting mid-tier US economic data, which could provide further direction for the markets.
Despite the challenges faced by fiat currencies, Bitcoin's price has shown strength. Bitcoin continues to trade in positive territory, reaching above $109,000 on Friday after rallying almost 7% throughout the week. This resilience highlights the contrasting performance between cryptocurrencies and traditional currencies amid current market conditions.