In accordance with expectations, a release of much better than expected data on the UK Retail Sales led to a premature breakout from a symmetrical triangle. However, the subsequent Federal Funds Rate announcement dragged the pair in the opposite direction. For the third day in raw the fall of the rate was stopped at the monthly R2, which is located at the 1.3485 level. Today the currency pair is not expected to make any significant moves, as it is squeezed between two combined barriers that are likely to neutralize any attempts of a breakout. From the top it is constrained by the 55- and 100-hour SMA, while from the bottom by the above monthly R2 plus the weekly PP at 1.3456. But from a daily perspective, the buck is expected to continue to gradually recover against the Pound.
