GBP/USD analysis: improved UK retail sales not enough to save the Pound
GBP/USD Current price: 1.3386
- UK Retail Sales bounced nicely in April after March's slump, but Pound's reaction limited.
- UK Q1 GDP second estimate expected to confirm soft growth.
The Sterling Pound surged during European trading hours on the back of better-than-expected UK April Retail Sales, which surprised with a 1.6% monthly rise after falling by 1.1% in March. The yearly figure printed 1.4% vs. the expected 0.1%, while the core readings, excluding fuel prices, were also upbeat. The GBP/USD pair peaked at 1.3421 with the news, to later stabilize below the 1.3400 figure, as despite the greenback lost its charm post-FOMC's Minutes, the Sterling continues struggling to find buyers. There were some rumors at the beginning of the day suggesting that UK PM May would be seeking to extend the transition period for two more years, but they were later denied by governmental sources. The UK will release this Friday the second estimate of Q1 GDP, foreseen unchanged at 0.1%, which would be no good for the UK currency. In the meantime, the short-term picture remains unchanged, with the risk skewed to the downside, given that in the 4 hours chart, the price is unable to advance beyond its 20 SMA, now around 1.3400, while technical indicators hold within bearish territory, the Momentum heading south after failing to overcome its mid-line, and the RSI hovering below its daily high and currently at 45.
Support levels: 1.3365 1.3330 1.3300
Resistance levels: 1.3420 1.3455 1.3490
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.
