GBP/USD: Pound shrugs off poor UK data, bounces

Valeria Bednarik FXStreet

GBP/USD Current price: 1.4238

UK retail sales fell by more than expected on unusual bad weather.
GBP/USD met buyers for a second consecutive day at key Fibonacci support.

The GBP/USD pair fell to a fresh weekly low of 1.4160, on the back of another poor UK macroeconomic reading. Following disappointing employment and inflation figures, the kingdom released its March Retail Sales, which fell 1.2% MoM vs. an expected 0.5% decline. Yearly basis, sales grew just 1.1%, against the 2.0% expected, while the ex-fuel figures were also below the expected ones. The decline was attributed to the unusually bad weather, that kept shoppers home during the month. The pair managed to bounce sharply from the mentioned low amid broad dollar's weakness and heads into the US session firmly above the 1.4200 figure, and near its daily high of 1.4240.

The 4 hours chart shows that the price is back above the 38.2% retracement of its latest bullish run, after bouncing for a second consecutive day from around the 50% retracement. Also, the 20 SMA converges with the next Fibonacci resistance at 1.4280, while the Momentum maintains its bearish tone within negative territory and the RSI advances, nearing its mid-line. Readings are not reflecting the ongoing momentum, but the rally can extend up to the mentioned 1.4280 level on persistent dollar's weakness, with a break above it favoring a retest of the recent multi-month highs around 1.4380.

Support levels: 1.4225 1.4180 1.4135

Resistance levels: 1.4280 1.4330 1.4380

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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