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GBP on the Defensive Ahead of UK Retail Sales

GBP
MNI (London)
  • GBP/USD continued to be pressed lower through Thursday trade, on the back of general USD strength prompted by Wednesday's hawkish FOMC.
  • GBP/USD traded to an eventual low of $1.3896 before it closed around $1.3925.
  • Move lower was again seen trailing EUR/USD's deeper move, which in turn allowed EUR/GBP to extend its easing to Gbp0.8542, with recovery efforts holding below the key 10-dma(current Gbp0.8585)
  • GBP/USD recovery extended to $1.3944 in Asia before sentiment reversed and rate was pressed back toward its Thursday low into Europe.
  • Next technical focus on $1.3890(61.8% $1.3669-1.4248), break here opens potential toward $1.3806/01(76.4% 1.3669-1.4248/May03 low), though expect some interim support to emerge into $1.3860/50(see MNI Techs below). Resistance $1.3944/50 ahead of $1.3963/71.
  • Early focus provided by the release of UK Retail Sales at 0600GMT, median 1.5%mm, 29.3%yy, ex-petrol 1.4%mm, 27.1%yy. BOE/GfK Inflation Expectations 0830GMT.
  • MNI Techs: GBPUSD remains weak following sharp losses Wednesday and Thursday. This week's price action has resulted in a break of the 50-day EMA and 1.4006, low May 13 and a recent key support. Price has also cleared the 100-DMA. Scope is seen for an extension lower towards 1.3858 next, May 6 low and 1.3801, May 3low. On the upside, initial resistance is seen at 1.4035, the 50-day EMA.
MNI London Bureau | +44 203-586-2231 | john.webb@marketnews.com
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MNI London Bureau | +44 203-586-2231 | john.webb@marketnews.com
BulletMarketsForeign Exchange BulletsHomepage

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