GBP/USD wants to resume the uptrend, battle for 1.4200

The GBP/USD is consolidating a little below 1.4200 after a move higher in the European session.
The GBP/USD bulls want a retest of the 2018 high.
Jon Cunliffe, the Bank of England Deputy Governor is set to speak in Washington at 16:30 GMT.

Flavio Tosti Independent Analyst

The GBP/USD is trading at around 1.4221 up 0.13% as the European forex session is slowly coming to an end.

The cable is consolidating in a 20-30-pip range around the 1.4200 handle supported by the 50-period simple moving average on the 4-hour chart.

Earlier in the European session, the UK Retail Sales missed expectations and the GBP/USD fell nearly 60 pips to 1.4160 testing Wednesday’s low. Amid a somewhat weak US dollar and a pullback in US equities, the cable bulls made a technical rebound and managed to shot the pair 80 pips higher from current daily lows at 1.4160.

The last bull leg from April 5 to 17 saw a lot of investors going long and the recent reversal down on April 17 might have caught market participants by surprise. The recent uptick might be attributed to profit-taking after the last bear leg as well as new longs entering the market betting on a trend continuation and a retest of the 2018 high.

Looking ahead on the UK calendar, Jon Cunliffe, the Bank of England Deputy Governor is set to speak at the Global Finance Forum in Washington at 16:30 GMT while Loretta J. Mester, FOMC member and president and chief executive officer of the Federal Reserve Bank of Cleveland will be speaking at 22:45 GMT this Thursday.

As we are getting close to the end of European forex session and no major macroeconomic data is to be released the GBP/USD will mainly be driven by general sentiment and technical trading.

GBP/USD 4-hour chart

The GBP/USD bulls are staging a reversal to target the 1.4300 figure and 1.4377 which is the high of the year. Support is seen at the low of the day at 1.4160 and then at the 1.4100 figure.

Author

Flavio Tosti

Independent Analyst

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