- GBP/USD continuing to push higher on weakening US Dollar.
- UK Retail Sales figures in the barrel, due at 09:30 GMT
Sterling is shaping up to continue the week’s theme of climbing over the US Dollar, quietly slipping passed yesterday’s high of 1.4104 in Tokyo trading, currently feeling around 1.4115 ahead of European markets.
The USD has returned to its bearish ways following a brief stint on the bullish side, and the ‘Dollar dump’ attitude in markets has accelerated following the US CPI beat on Wednesday, with the USD unable to find a footing as it slides against its major counterparts, including the GBP.
Confidence in the Sterling appears to be growing on the back of improving economic data from the UK, and the Bank of England (BoE) is on pace to begin raising interest rates this year following a decade of easy monetary policy, with some analysts anticipating a rate increase as early as mid-May.
Today will see the release of Retail Sales figures for the UK at 09:30 GMT. Median forecasts are calling for a 0.5% gain on the indicator following last period’s 1.5% contraction, but as analysts at Societe Generale noted, Retail Sales tends to experience volatile swings, and SG is anticipating a muted 0.2% increase in sales figures.
The pair is once again trading closer to the high of 1.4344 that capped off the last bullish swing that ended in late January. The recent pullback on Dollar buying saw GBP/USD decline to the 34 EMA at 1.3830, but that move was shortlived and GBP/USD has closed higher for four consecutive trading days. With intraday action on the decidedly bullish side, support can be found at the last swing low on H4 charts, near 1.3820, while a bullihs continuation from here will see reissitance at 1.4270.