GBP/USD: outlook for April 10-14
The British pound slipped to 1.2420 from Monday’s high of 1.2555 as economic data out of the UK were disappointing. UK Manufacturing PMI came short of market expectations, UK industrial production figures declined, and the trade deficit has widened. Friday’s US labor market report was a bit controversial with soggy NFP headline and jobless rate decrease.
Next week we will receive the UK inflation figures on Tuesday and labor market data on Wednesday. Upbeat economic releases will allow the pound to recover to its fairer levels. In case of disappointing data, traders are likely to give the pound additional dunk. From the US statistical agencies, we will get a bunch of inflation releases and a monthly update of retail sales. On Monday, traders should skim through the highlights of Fed Chair Yellen’s speech and spare a few minutes for listening FOMC member Kashkari on Tuesday. As the official Brexit process is finally underway, market awaits a formal response from the EU on the terms of its separation with the UK. In the light of the lull of the Brexit related news, the pound’s nominal value will depend on the UK economic fundamentals.
Technical outlook for the present moment is bearish. The quotes rollbacked from the diagonal resistance and slumped to 1.2420. The lackluster downward momentum has picked up strongly after Friday’s economic releases (there is a bearish engulfing pattern on the H4 timeframe), and the odds for a sustained break below the current levels are quite high. The next supports can be found at 1.2375 (200-H4 MA) and 1.2240 (March 16 low). In case of rebound, quotes might rise to 1.2455, 1.2470 or 1.2495 levels.
