GBPUSD: Cable stronger after UK Retail Sales. Carney speaking today


GBP/USD: 1.5659
Sterling had a sharp move higher after the release of the April UK retail sales, which easily beat expectations, by rising 1.2% (vs 0.4% exp mm) and was an impressive rebound from March’s -0.7% mm fall.Having dipped to a session low of 1.5524 in early UK trade, Cable has so far topped out at 1.5700, currently sitting slightly lower, at 1.5660.

The 4 hour charts remain positive (as do the weeklies) and thus another test of 1.5700 would not really surprise, above which would find offers at 1.5725 (76.4% of 1.5814/1.5445) and 1.5750, although I am not sure that the recent 14 May high at 1.5814 is yet in sight.

The dailies though are rolling over, and if we do see a near term move towards 1.5725/50 I suspect it would present a sell opportunity for another test of the downside, where support is to be found nearby at the 200 HMA (1.5650), below which would head back to the 100 HMA (1.5605) and the 55 HMA (1.5560), where the 200 DMA also currently lies. Back below this could see another run towards 1.5480, where the rising trend support now lies, and then to the session low at 1.5425. Further out, a break of 1.5400 would signal a decline towards Fibo support 1.5365 (61.8% of 1.5104/1.5814) and to 1.5335 (38.2% of 1.4565/1.5814).

Watch out for a speech from Mark Carney today, who may be hawkish on the economy but will be wary of sending Cable too much higher.

Economic data highlights will include:

PSNBR, Mark Carney speech.

Gbp

 

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