GBP/USD ahead of retail sales
GBP/USD descended from the recent high at $1.6822 and consolidated in the $1.6670/80 area.
A report tomorrow may show that UK retail sales declined by 0.9%. Data is due at 09:30 GMT. Still, analysts at Credit Agricole don’t think that a poor reading may destroy the pound’s uptrend. In their view, sterling will only make a little dip as it’s fundamentally supported by Britain’s relative growth performance. Moreover, the specialists say that there’s a good chance that retail sales to surprise on the upside.
Analysts at Commerzbank point out that the high at $1.6822 isn’t confirmed by the daily RSI. In their view, pound will likely correct lower in the near term or at least attempt to consolidate some of its recent gains. The bias will remain to the upside as long as GBP/USD stays above 1.6630/00 (38.2% retracement of February’s advance). Resistance is at $1.7600 and $1.6740. The bears still need to break below $1.6550 to turn the focus to the key support at $1.6259/29 (September high and 23.6% retracement of the move up from July 2013).
Chart. Daily GBP/USD