GBP gets fresh boost as UK retail data series pip expectations

retail shopping high street

The British pound sterling (Currency:GBP) got a fresh does of impetus at 09:30 when the UK retail data series came in above expectations confirming the veracity of the UK economic recovery. The overarching theme on Thursday is however a weaker US dollar which has aided GBP/USD advance further above the key 1.6 level. The outlook for the pound does however remain less assured, we consider the various viewpoints on the matter.

 

17:15: Sean Lee at FXWW has a warning for the GBP/USD bears:


This move seems to have quite a bit of momentum behind it and it’s real money funds who are doing the bulk of the selling, mainly against the GBP, EUR and the JPY.

Cable in particular looks very strong and if you’re bearish, take the day off is my advice


17:07: The pound attempts to form a new ascending structure


RoboForex tell us that the British pound is set to take out 1.6080:

"The pound couldn’t form its ascending structure and reached a new minimum. Right now, the market is making another attempt to start an ascending movement again; so far it has formed one impulse. We think, today the price may reach a new minimum and then start forming a new ascending structure. the target remains the same – 1.6080."

 ascending structure

15:20: GBP must break through key resistance for a longer-term bull rally


Matt Wellet at GFT has his eyes on a key resistance level ahead:

"Like its mainland cousin, the pound is also rallying strongly against the U.S. Dollar as we go to press. Rates are approaching previous resistance at 1.6100, but a break through this ceiling would bolster the bullish case for a continuation higher in today’s North American trade. Meanwhile, any short-term pullbacks from the 1.6100 level may represent an opportunity to buy the pair at a more favourable rate."

 

13:10: British pound outlook is split


Latest technical outlook for euro/dollar, pound/dollar, dollar/yen:

 

13:06: Has the EUR/GBP recovery run its course?


euro pound exposureA quick note of interest from Piet Lammens at KBC Markets:

"We were looking for signs that the GBP-correction has run its course. Tentative signs for this scenario are building."

"We were looking to (re)install  sterling long exposure. EUR/GBP revisited our 0.8450 to 0.8505 target zone to go long sterling again."

We will bring any updates on the KBC Market position accordingly.

11:35: More gains for the pound vs US dollar today


Boris Schlossberg at BK Asset Management is backing further gains for GBP on the back of today's retail sales figures:

"Overall this a third month of gains out of the past four and suggests that UK consumer demand continues to expand at a positive albeit modest pace. Todays news should be a net contributor to UK GDP growth and is clearly supportive of the pound, although the pair continues to face resistance at the 1.6100 level and even greater resistance at 1.6200. Still if the anti-dollar rally continues into North American trade, sterling could push towards 1.6150 as the day proceeds."

11:02: USD liquidation supports GBP/USD, but mixed signals suggest caution


pound dollar outlookIpek Ozkardeskaya at Swissquote Research on the likely direction of GBP/USD:

"GBPUSD expressed a wide range between 1.5895 to 1.6061 but no directional indication. In broad terms we suspect a period of USD liquidation and risk seeking which could put GBP higher. But on tech stand point mixed signals will keep us on the sidelines for now.

"The support levels from here are 1.5884 (13th Sept high), 1.5759 (17th June high), 1.5670 (65 dma), 1.5600 (resistance turned support) then 1.5446 (200 dma). Watch for next resistance to come into play at 1.6172 (4th Oct high), 1.6270 (1st Oct high) then 1.6343 (2013 high)."

09:37: GBP stages comeback vs Euro following retail sales data


The British pound started the day in pretty good form against the majority of currencies but a sore point was the euro. Since the release of today's main data event at 09:30 the GBP/EUR has recovered and is now 0.1 pct up at 1.1799.

09:30: A clean sweep for retail sales!


retail sales in clean sweepUK retail sales have beaten expectations, defying the gloom-mongers:

Retail Sales (YoY) (Sep) = +2.2%, forecasts were at +2.1%, last month was at +2.1%.
Retail Sales (MoM) (Sep) = +0.6%, forecasts were at +0.4%, last month was at -0.9%.
Retail Sales ex-Fuel (MoM) (Sep) = +0.7%, forecasts were at +0.3%, last month was at -0.8%.
Retail Sales ex-Fuel (YoY) (Sep) = +2.8%, forecasts were at +2.1%, last month was at +2.3%.

09:21: Can we please forget the US and get back to the fundamentals


It's damn difficult to call the currency markets at present unfortunately. IronFX Head of Global FX strategy Marshall Gittler discusses this issue and tells us why the US dollar is under-performing today:

 

09:08: GBP looking overbought vs US dollar


Luc Luyet at MIG Bank has expressed caution about the sustainability of the current GBP/USD rally:

"GBP/USD experienced a volatile session yesterday. The successful test of the key support at 1.5886 is short-term positive. Hourly resistances stand at 1.6059 (16/10/2013 high) and 1.6124 (08/10/2013 high).

"In the longer term, prices are close to the strong resistance area between 1.6302 (30/04/2012 high) and 1.6381 (see also the longterm declining trendlines). Given the increasing overbought conditions, we would be mediumterm cautious on GBP/USD, as it has already priced in a lot of positive news."

09:00: Retail sales present risks to the downside


lloyds forecastsLloyds Bank Research are not confident ahead of today's retail sales numbers:

"Today’s retails sales numbers will be a focus. The market is expecting a slight rebound following declines seen in August. However, our economists view risks are to the downside. A small decline in September retail sales still suggests growth above 1% in Q3. However, the market will unlikely look beyond the headline print and a weaker number will be sterling negative. We see any dips in GBP/USD as buying opportunities as we still favour a move higher in GBP/USD back up to the recent highs around 1.6250. But a weaker UK print today could see a test of the 0.85 level in EUR/GBP."

08:43: Today's main driver are retail sale figures


Yesterday it was all about UK labour market data which was a little better than market forecasts, with the jobless claims falling more than expected.

However, the market reaction was somewhat modest as there was hope of slight decline in the unemployment rate.