GBP/USD tests 2018-high ahead of UK data-intensive calendar next week
|- The GBP/USD is facing important resistance at 1.4245-1.4346.
- The positive sentiment on the pound helps to keep the pair close to yearly highs.
The GBP/USD is trading at around 1.4253 up 0.17% on Friday. It is trading close to key resistance levels with the 200-period simple moving average on the weekly chart at 1.4245 and the 2018 high at 1.4346.
Earlier on Friday, the pound tested levels not seen since January 25 (2018 high). In the absence of significant data from the UK, the pair is mainly driven by the general market sentiment, the speeches from Fed’s member in the US and the technical outlook.
It will be a data-intensive calendar for the cable next week with the UK inflation, labor market and retail sales data. The data will be closely looked by investors as the Bank of England will be watching for clues to hike sooner rather than later.
On the other side of the Atlantic, next week will see the US retail sales report for March, housing starts for March, building permits and a plethora of Fed’s members' speeches.
The Pound this week benefitted from a fresh wave of buying as the Bank of England is expected to raise rates next month. Also on Thursday, the UK Brexit secretary David Davis said that nothing will really change for business during the post-Brexit transition period; which helped keep the positive sentiment on the pair. The somewhat easing of tensions between the US and China and the return of the risk-on mood benefitted the cable.
GBP/USD 4-hour chart
The market rejected the 1.4300 resistance level an traded as high as 1.4297 in Friday’s trading. However, the current bull momentum is strong and the bears were unable to generate any convincing counter-trend move down up to this point. A failure to move beyond the 1.4245-1.4346 resistance zone could lead to a pullback to the 1.4145 swing low and 1.41 psychological level in the short-term. A break above the 1.4245-1.4346 zone can lead to an acceleration towards the 1.4500 psychological level.
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