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GBP/USD drops below 1.45 on strong US retail sales data

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Feb 12, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    The bid tone around USD recovered, pushing the GBP/USD pair below 1.45 levels after the data in the US showed consumption ticked higher for the third straight month in January.

    Drops below hourly 200-MA

    The spot fell to 1.4481, before recovering marginally to trade around 1.4490 (hourly 200-MA + hourly 50-MA). The US commerce department figures showed retail sales growth was better-than-expected in January. December’s figure was revised to positive territory as well.

    Furthermore, the control group figures, which forms the part of GDP calculations, blew past expectations. The figure adds credence to Yellen’s view that economy is being supported by labor market gains and uptick in consumer spending.

    Consequently, the USD recovered across the board. The greenback may remain upbeat as stocks point to a relief rally, triggering an unwinding of USD shorts.

    GBP/USD Technical Levels

    The immediate support is seen at 1.4467 (hourly –MA), under which the spot could target 1.4443 (38.2% of 1.4079-1.4668). On the other hand, a break above 1.4516-1.4519 (23.6% of 1.5930-1.4079 + 38.2% of 1.5230-1.4079) could see the spot re-test 1.4570 (daily high).
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