By Fast Brokers
GBP/USD
The Cable is settling after yesterday’s selloff in reaction to disappointing retail sales data from the U.S. The pullback came on pretty large volume, so we could see a continued near-tem downturn with a retest of 1.50. However, the bull trend in the Cable is still in control since any foreseeable downtrend line remains far beneath present price. Additionally, the economic data from Britain continues to come in positively, including Tuesday’s key Manufacturing Production and CCC releases. The CCC number was very encouraging since it beat analyst expectations by a long shot for the second straight month. Therefore, Britain’s employment market seems to be improving with the CCC on a downward slope. However, the CCC number is still at historically elevated levels, and analysts shouldn’t get too comfortable until it reaches the 15k area. Regardless, we’ve witnessed improvements in British economic data across the spectrum over the past month, giving the Pound relative strength with little reason to change our bullish outlook trend wise.
Attention will turn on the U.S. and EU for the remainder of the week as both countries release CPI data while the EU provides GDP numbers. The S&P has dipped back below 900, signifying a near-term struggle to the upside. We expect the GBP/USD to fall in line with its positive correlation with the EUR/USD and S&P futures over the next 48 hours while exhibiting its relative strength. Keep an eye out for 1.50 to the downside, for if this psychological level doesn’t hold we could see the pullback pick up speed. To the topside May and January highs serve as the key fundamental battlegrounds restricting excited gains.
Fundamentally, we find resistances of 1.5241, 1.5277, 1.5310, 1.5389, and 1.5465. To the downside we see supports of 1.5190, 1.5109, 1.5065, 1.5000, and 1.4940. The GBP/USD is currently exchanging at 1.5208.
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