GBP/USD rebounds and approaches 1.4000

  • US data disappoints but not likely to change expectations on next week FOMC meeting. 
  • Pound shows resilience despite UK-Russian crisis over ex-spy poisoning. 

GBP/USD rebounded at 1.3920 and rose to 1.3980 during the American session. It is back again into positive territory for the day. The pound is also up versus the euro and the Swiss franc. The crisis between UK and Russia escalated with Britain expelling 23 Russian diplomats. The pound remained resilient. 

Cable bottomed a few hours ago at 1.3924 amid a rally of the greenback. The US Dollar lost ground immediately after the release of US data but then rebounded and erased losses. 

US retail sales unexpectedly dropped 0.1% in February, suffering the third consecutive monthly loss (against expectation of a 0.3% gain). Another report showed that the Producer Price Index rose 0.2% in February, above the 0.1% expected. The data is not likely to influence in next week FOMC meeting. 

According to media reports, US President Trump, plans to name Larry Kudlow to replace Gary Cohn as director of the National Economic Council. Concerns about more changes to the cabinet affected equity prices today. The Dow Jones opened in positive but it was losing 0.66%: 

GBP/USD Technical levels

To the upside, above 1.3980 the next resistance is seen at 1.4000 followed by 1.4025. On the flip side, support could be located at 1.3940, then 1.3920/25 (Mar 14 low) and 1.3975 (Mar 13 low). 

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