GBP/USD Forecast: UK retail sales awaited, Eyes 100-DMA at 1.51

The British Pound soared across the board on Wednesday after the Bank of England (BOE) minutes revealed all members see rate hike as the next likely move over a three-year forecast period. Policy makers are also confident that the wage and price inflation would catch up eventually with the pace of economic growth. The slightly hawkish tone of the minutes pushed the GBP/USD pair to an intraday high of 1.5078. More importantly, the pair managed to finish the day above 1.5 levels for the first time since Mar. 11th. Focus now shifts to the UK retail sales data (exp 5.4%, prev 5.7 yoy) due for release later today. The retail turnover has held up well, contrary to the dip seen in the US economy. Moreover, upbeat retail sales indicate the lower inflation is having a desirable effect of boosting consumption. Consequently, a strong retail sales figure could see the pair test its 100-DMA at 1.51. In case we have big disappointment, the pair could dip to 1.4973, although the pair is likely to bounce back above 1.5 levels.

On the daily chart, we see the pair managed to finish above 1.5 levels in the previous session, thereby opening doors for further gains. The 50% Fib retracement of 1.5550-1.4564 at 1.5057 could act as a resistance, although the bullish daily closing is likely to ensure the pair rises above the same. The immediate gains appear capped at the 100-DMA located at 1.51. Meanwhile, fresh offers could be seen in case the pair fails to rise above 1.5057. In such a case, the losses are likely to be capped around 1.4973 (5-DMA). It remains to be seen if the pair manages to finish the New York session above 1.5 levels. If we have a daily close below 1.5, the bears are likely to regain control from tomorrow.

EUR/USD Analysis: Supported by hourly 200-MA ahead of PMI reports

The EUR/USD wavered on Wednesday amid contradicting statements from Greek finance minister Varoufakis, who said there are clear signs of convergence between Greece and its creditors, and state minister Pappas, who said Greece would continue to reject pension cuts. The contradicting statements indicate there is a low possibility of a deal being reached on Apr 24th. As for today, the PMI reports are likely to share the limelight along with Greek issue. The upbeat PMI reports could create lot of problems for EUR bears, as it would provide just enough reason for punters to abandon their shorts. In such a case, I expect the pair to re-test 1.08 levels. On the other hand, disappointing PMI reports could push the pair down to 1.0658 levels.

On the hourly charts, we see the pair was supported by the hourly 100-MA located at 1.0690 levels earlier today. The RSI indicator continues to stay bearish on the daily as well as the hourly time frame. However, the EUR could be bid higher to 1.0770 once the pair manages to recover above its 10-DMA at 1.0718. It remains to be seen if the pair moves closer to 1.08 in anticipation of an upbeat PMI report. In such a case, the pair could either consolidate around 1.08 break lower post the release of PMI reports. Meanwhile, an attempt at 50-DMA located at 1.0827 could be seen if the German and Eurozone PMI beat expectations by a wide margin. The losses appear capped at 1.0658 levels.