- – The British Pound recovered well from the 1.1986 low against the US Dollar.
- – There is a major contracting triangle pattern formed on the 4-hours chart of GBP/USD with resistance near 1.2530, which may be tested.
- – Recently in the UK, the Retail Sales released by the National Statistics posted a decline of 1.9% in Dec 2016, compared with Nov 2016.
UK Retail Sales
The last major economic release in the UK was the Retail Sales by the National Statistics. The market was expecting the total receipts of retail stores to decline by 0.1 in Dec 2016, compared with Nov 2016.
However, the result was well below the forecast, as there was a decline of 1.9%. The yearly change in the retail sales posted a rise of 4.3% in Dec 2016, which was a lot less than the forecast of 7.2%. Moreover, the UK Retail Sales ex-fuel posted a decline of 2% (MoM), compared with the -0.3% forecast.
The outcome was mixed, and stating on the figure, Kate Davies, ONS Senior Statistician, mentioned “Retailers saw a strong end to 2016 with sales in the final quarter up 5.6% on the same period last year, although the amount bought fell between November and December once the effects of Christmas are removed”. The British Pound remained in the positive trend with no major decline in GBPUSD.
GBP/USD Technical Analysis
The British Pound after forming a base near 1.2260 started an uptrend against the US Dollar, and moved above 1.2400. There was a strong rise, as the GBP/USD pair moved above the 76.4% Fib retracement level of the last decline from the 1.2431 high to 1.1986 low.
The GBP/USD pair is currently trading above the full swing high of 1.2431, which means there is a chance of a move towards the 1.236 extension of the last decline from the 1.2431 high to 1.1986 low at 1.2536.
The stated level also coincides with the resistance trend line of a major contracting triangle pattern formed on the 4-hours chart. So, if the pair continues to move higher, and trades near the 1.2530-1.2540, there is a chance of a reaction. On the downside, the pair remains supported near 1.2400 and the triangle lower trend line.Tags: British Pound, GBP/USD Technical Analysis, US Dollar