GBP/USD: Buyers await UK retail sales to validate 1.3035/30 support
- Traders await fresh clues from the economic calendar to justify the strength of near-term support-line.
- Lack of Brexit news limits pair moves with overall anti-no-deal sentiment restricting further downside.
The GBP/USD pair is mostly unchanged around 1.3040 ahead of the London open on Thursday. The quote clings to a nine-week-old upward sloping trend-line while waiting for the UK retail sales for fresh triggers.
The Cable recently dropped to the lowest in a week after the UK consumer price index (CPI) fell behind 2.0% forecast to remain unchanged at 1.9%. However, lack of Brexit negatives and aforementioned support-line confined the pair’s further declines.
Easter recess in the British Parliaments till April 23 restricts the Brexit news flow off-late.
During early Thursday, investor sentiment remained mostly downbeat as news of KCNA report that North Korea tested tactical weapon under the leader Kim Jong Un’s guidance renewed geopolitical fears of the US-North Korea tension.
With this, the US 10-year treasury yield dropped nearly 2 basis points to 2.57% from 2.59%.
Looking forward, March month retail sales from the UK will become the key driver for the GBP/USD pair as the same contributes the majority into the British GDP. The retail sales growth is expected to decline -0.3% from +0.4% on a monthly basis but may rise 4.6% from 4.0% earlier while observing YoY format. The retail sales ex-fuel, also known as core retail sales, may advance by +4.0% versus 3.8% and drop with -0.3% against +0.2% on a yearly and an MoM basis.
In addition to the UK retail sales, the US is also up for releasing its March month retail sales data together with Philadelphia Fed manufacturing survey (Mar), weekly jobless claims and Markit PMI (Apr).
The US retail sales control group could rise +0.4% from -0.2% earlier contraction whereas its manufacturing gauge may soften to 10.4 from 13.7. Also, initial jobless claims for the week ended on April 12 may increase to 205K from 196K while Markit manufacturing purchasing manager index (PMI) could strengthen to 52.8 from 52.4 with services PMI likely weakening towards 55.0 from 55.3.
GBP/USD Technical Analysis
Given the upbeat British data triggers the GBP/USD pair’s upside, 1.3070 and 1.3100-1.3108 area comprising 50-day simple moving average (SMA) and a descending trend-line since March 13, seem important to watch. It should also be noted that the break of 1.3105 can fuel prices to 1.3130 and 1.3200 during the further rally.
Alternatively, break of more than two-month-old ascending trend-line now near 1.3035/30 can drag the quote to 1.3000 and 200-day SMA level of 1.2970.
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
