The GBP/USD pair posted a shallow bounce from a low set at 1.4056 after the release of the UK Retail Sales, above expected, but well below previous month readings. In fact, retail sales fell in February by 0.4%, while year-on-year basis, came in at 3.8% matching expectations. Core reading, which excludes fuel, fell by 0.2% monthly basis, against a 1.0% drop expected.
The poor reading is doing little for the Sterling that continues trading below the 1.4100 figure against its American rival. Investors seem unwilling to buy the UK currency, and will likely wait for upcoming US data, which includes weekly unemployment claims and the services PMI, before taking larger positions.
Roughly 10 pips above its daily low, the GBP/USD pair 4 hours chart shows that the technical indicators are still heading south, despite being in extreme oversold territory, whilst the price struggles around the 23.6% retracement of this year decline. The 20 SMA has accelerated its decline far above the current level, and crossed below the 200 EMA, suggesting further declines ahead. Should the slide extend below 1.4050, the pair will likely test the key 1.4000 support, and a break below it will likely trigger stops and fuel the decline down to the 1.3940/60 region.
The immediate resistance comes at 1.4095, and a recovery above it can see the pair correcting higher up to 1.4135. Further gains are not yet seen, but the rally can extend up to 1.4180, if US data disappoints big.
View the live chart of the GBP/USD
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