UK retail sales confirms Cable confidence
|USDGBP, Daily
UK April retail sales exceed expectations, rising 2.3% m/m after a 1.4% n/n contraction in the previous month (revised up from a -1.8% m/m original figure). The median forecast had been for a much more moderate 1.0% m/m increase. The y/y figure rose 4.0%, up from 2.0% y/y in March (also revised higher, from 1.7%). The stellar data was pinned on warmer weather and the disturbance to seasonal adjustments caused by the late timing of the Easter break this year relative to last year. The rolling three-month figure showed sales rising in a more restrained manner, by 0.3%. The strong monthly data was nonetheless a bullish cue in forex markets, prompting a rally in sterling, which is presently showing an average 0.5% advance against the G3 currencies.
USDGBP, as I have suggested a number of times already this week, is in confident mood. The key Golden Cross on Monday (May 15) continues to be confirmed and the spike through my pending order at 1.2984 was filled on the Retail Sales news. Target 1 is a little over the 14 DATR at 1.3080, with target 2 at the seemingly heady 1.3162 and the 38.2 Fibonacci retracement level of the post Brexit cable collapse.
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