Key Highlights
- The British Pound found a strong support at 1.3965 and recovered against the US Dollar.
- There was a break above a bearish trend line with resistance at 1.4080 on the 4-hours chart of GBP/USD.
- The UK Halifax House Price Index in March 2018 increased 1.5% (MoM), more than the forecast of 0.2%.
- The UK British Retail Consortium (BRC) Like-For-Like Retail Sales in March 2018 grew 1.4% (YoY), compared with the +0.7% forecast.
GBPUSD Technical Analysis
This past week, there was a sharp downside move in the British Pound below 1.4050 against the US Dollar. Later, the GBP/USD pair found a strong support at 1.3965 and recovered above 1.4050.
During the recent recovery, the pair broke the 50% Fib retracement level of the last decline from the 1.4244 high to 1.3965 low. Moreover, there was a break above a bearish trend line with resistance at 1.4080 on the 4-hours chart.
The pair is now trading well above 1.4050, and the 100 (red) and 200 (green) simple moving averages (4-hour). These are positive signs above the 1.4050 level. On the upside, a break above the 61.8% Fib retracement level of the last decline from the 1.4244 high to 1.3965 low at 1.4137 could open the doors more gains.
The next resistance on the upside could be near the 1.4180 and 1.4200 levels. On the downside, the 1.4070 support and the 100 SMA may act as a support if the pair corrects lower from the current levels.
Recently in the UK, the British Retail Consortium (BRC) Like-For-Like Retail Sales report was released for March 2018. The market was positioned for rise of 0.7% compared with the same month a year ago.
The actual result was positive as there was an increase of 1.4% in the BRC Like-For-Like Retail Sales. Overall, the GBP/USD pair may continue to rise as long as the 1.4050 support is intact.
Economic Releases to Watch Today
- US Producer Price Index March 2018 (MoM) – Forecast +0.1%, versus +0.2% previous.
- US Producer Price Index March 2018 (YoY) – Forecast +2.9%, versus +2.8% previous.
- US Wholesale Inventories for Feb 2018 – Forecast +0.9%, versus +1.1% previous.
- US NFIB Business Optimism Index March 2018 – Forecast 107.0, versus 107.6 previous.
