Key Highlights
- The British Pound was rejected from the 1.3100 support area against the US Dollar.
- There was a break above a major connecting bearish trend line with resistance at 1.3230 on the 4-hours chart of GBP/USD.
- The US Retails Sales in June 2018 increased 0.5% (MoM), similar to the forecast.
- Today in the UK, the Claimant Count Change for June 2018 will be released, and the forecast is 2.3K.
GBPUSD Technical Analysis
The British Pound corrected lower this past week below 1.3150 against the US Dollar. However, the GBP/USD pair found a strong buying interest near 1.3100, resulting in a sharp upward move.
Looking at the 4-hours chart, the pair jumped higher with back-to-back bullish candles above the 1.3150 resistance. The upside move was such that the pair broke the 1.3220 resistance and settled above the 100 simple moving average (red, 4-hour).
There was also a break above the 50% Fib retracement level of the last decline from the 1.3362 high to 1.3102 low. It seems like the pair moved back in a bullish zone and it could rise further towards the 1.3320 level.
If there is a downward correction, the pair may perhaps find support near the 1.3210 level and the 100 SMA.
Recently in the US, the Retail Sales report for June 2018 was released by the US Census Bureau. The market was looking for a rise of 0.5% in sales compared with the previous month.
The result was similar to the forecast, but the retail sales control group posted no change, whereas the market was looking for a rise of 0.4%. The report added:
Total sales for the April 2018 through June 2018 period were up 5.9 percent (±0.5 percent) from the same period a year ago. The April 2018 to May 2018 percent change was revised from up 0.8 percent (± 0.5 percent) to up 1.3 percent (±0.2 percent).
Overall, the US Dollar buyers were not impressed, resulting in an upward move in EUR/USD and GBP/USD.
Economic Releases to Watch Today
- UK Claimant Count Change June 2018 – Forecast 2.3K, versus -7.7K previous.
- UK ILO Unemployment Rate May 2018 (3M) – Forecast 4.2%, versus 4.2% previous.
- UK Average Earnings Including Bonus May 2018 (3Mo/Year) – Forecast +2.5%, versus +2.5% previous.
- UK Average Earnings Excluding Bonus May 2018 (3Mo/Year) – Forecast +2.7%, versus +2.8% previous.
- US Industrial Production June 2018 (MoM) – Forecast +0.5%, versus -0.1% previous.
- US Capacity Utilization June 2018 – Forecast 78.3%, versus 77.9% previous.
