GBP/USD found support at its 100-day moving average at the start of the week and has rallied every day since. The pair is up just over 1% on the week and is the strongest currency among the majors for the week thus far.
The weakest currency this week has been the euro and the EUR/GBP exchange rate is poised to close the week out showing the largest weekly loss in four months.
In British politics, UK Finance Minister Sajid Javid unexpectedly announced his resignation on Thursday. Sajid opposed PM Johnson’s order to fire his aids and has been replaced as Chancellor by Rishi Sunak, who has been the Conservative MP for Richmond in Yorkshire since 2015.
The US consumer price index in the United States was reported to rise by 2.5% in the year to January which was the largest annual increase in more than a year. On a month over month basis, the index declined by 0.1%
US retail sales data will be released in the North American session today.
While the British pound has managed to post gains against the dollar every day in the week thus far, the exchange rate has not been able to erase the damage from last week.
The technical outlook on a weekly chart signals more downside to come as a result of last week’s bearish candle, in the absence of a notable rally later today.
Over the near-term, the 1.3050 level is seen as resistance. The pair has lost momentum since reaching the level yesterday and is displaying mild selling pressure in the early day today.
The recovery this week has negated the bearish implications of last week’s break below an important horizontal level at 1.2960. The broader outlook for the pair currently points to a range.
In the event of an upward break above 1.3050, the next level of interest falls at 1.3171. To the downside, support for the session ahead is seen at the psychological 1.3000 handle.
- GBP/USD has posted four consecutive daily gains.
- The pair is poised to close the week above a major technical level at 1.2960 which negates the bearish implications of the downside break below the same level last week.
- US retail sales figures will be released in the North American session.
This article was originally posted on FX Empire
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