GBP/USD Analysis: above 1.2500 as Williams spooks dollar’s bulls

Valeria Bednarik FXStreet

GBP/USD Current Price: 1.2538

UK Retail Sales more than doubled the market’s estimates in June.
Fed Williams’ comments gave the pair an additional boost ahead of Wall Street close.
GBP/USD challenging a daily descendant trend line, bullish above it.

The GBP/USD pair edged higher Thursday, with the Sterling underpinned by better-than-expected UK June Retail Sales. According to the official data, sales in the kingdom were up by 1.0% MoM, much better than the -0.3% forecasted. Yearly basis, sales were up by 3.8% vs. the expected 2.6% advance. The figures are a big relief for those expecting UK’s economy falling into contraction in the second quarter of the year following the release of dismal PMI earlier this month. Nevertheless, speculative interest continues seeing increased chances of a hard-Brexit, which prevented the advance to become relevant in terms of trend. This Friday, the UK will release Public Sector Net Borrowing, seen down in June to £3.200B from £4.463B in the previous month. The pair extended its gains up to the current 1.2520 region following dovish comments from Fed’s Williams triggering a dollar’s sell-off.

GBP/USD short-term technical outlook

The GBP/USD pair has advanced for a second consecutive day but remains in the red weekly basis, now surpassing a daily descendant trend line coming from June high at 1.2783. The short-term picture for the pair is positive, as, in the 4 hours chart, it settled above its 20 SMA after breaking below the indicator at the beginning of the week. Technical indicators are showing a strong upward potential at the time being, as the Momentum heads higher almost vertically well above its mid-line, still neutral, while the RSI resumed its advance, currently at around 63. If the pair manages to hold above 1.2505, the immediate support, it has room to extend its gains up to the 1.2630 price zone this Friday.

Support levels: 1.2505 1.2460 1.2420

Resistance levels: 1.2545 1.2590 1.2630

View Live Chart for the GBP/USD

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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