The British Pound retreated along with the rest of the majors against a broadly firmer dollar Friday. The move comes as a follow through to Thursday’s earlier drop and in response to the UK’s own retail sales data that showed a sharper contraction at 1.2% againts an -0.6% consensus forecast basically confirming that largely expected rate cut from the BoE on the first of August. Note that until then any sign of weakness for UK data will likely be seen as further confirmation for the BoE MPC’s likely hood to cut and an excuse for weakness.
Resistance
- 1.30445 – High for the Year
- 1.29995 – Intraday Consolidation High/Low
- 1.29390 – Intraday Consolidation Floor
Support
- 1.29011 – Intraday Consolidation Floor
- 1.28203 – Daily Consolidation Ceiling
- 1.27785 – Intraday Consolidation Floor
GBPUSD has managed to break lower of the past weeks congestion by its close Friday with an almost maru bozu daily candle. We also see the daily stochastic accompanying the break lower reinforcing our bias for the sell side. For now a break of 1.29011 may be seen as an entry to test the previous daily consolidation ceiling from May/June. Alternative entry will be if we see long wicks in the hourly picture suggesting a failed attempt at recouping last weeks consolidation area.
