The GBP/USD traded in a range bound markets during the previous week trading session as markets were quiet and investors were being cautious in decision making. However, the Great Britain economy saw a modest improvement in its March Retail Sales, with an improvement from -0.4% to 1.0%. February’s report was also revised from 1.7% to 1.3% which caused a doubt in the approach to the single currency.
Price failed to break 1.68403 resistance (last week’s high) and started heading southwards with the MPC Asset Purchase Facility Votes and MPC Official Bank Rate Votes weakening the GBP currency. Weekly bias still remains on the upside in the bigger picture as price rejected the 55 EMA on the 4hours time-frame. A break of 1.68403 resistance would resume the bullish trend and more demand to 1.70430 resistance (August 2009 high) is expected.
However, a break of 1.67620 support (last week’s low) would see price decline further to 1.66614 support as short term picture shows sign of bearish trend is about to emanate on the 1hour time-frame. I recommend a close watch on the Prelim GDP q/q scheduled to be release during the early trading days of the following weeks trading session. This would make a strong impact on the single currency and would determine whether strength or weakness would be seen in the GBP currency.
Key Economic Indicators to also watch out for in the coming week is the Advance GDP q/q, ISM Manufacturing PMI and Employment Statistics from the U.S economy.