Sterling forms double bottom ahead of the UK retail sales
The British pound rose against the US dollar ahead of important UK retail sales numbers. The median estimate is for the country’s core retail sales to rise from -8.8% in January to 1.9% in February. This will lead to an annualised decline of 1.5%. The headline retail sales are expected to fall by 3.5% year-on-year because of the pandemic. These numbers will come a few days after the ONS released relatively strong UK employment numbers and weak inflation data.
The US dollar gained against other currencies after the US released weak initial jobless claims numbers. The Bureau of Labour Statistics said more than 684,000 Americans filed for initial jobless claims last week. This was the lowest reading in months. The continuing claims declined from 4 million to 3 million. The currency also reacted to Joe Biden’s new pledge to vaccinate more than 200 million Americans in the next few months. Later today, it will react to the latest personal income and spending data from the US.
The economic calendar will have several important events today. In Germany, the ifo Institute will publish the latest current assessment and business expectations data. Economists expect the data to show a rebound in sentiment as the country extends its vaccination. In Sweden, the statistics agency will publish the latest retail sales numbers while the Norwegian statistics agency will deliver the latest unemployment data. The US federal budget will also be published today.
The GBP/USD pair rose to an intraday high of 1.3760, which was the highest level since March 24 last year. On the hourly chart, the pair had formed a double-bottom pattern at 1.3760. It also moved above the short and medium-term moving averages while the awesome oscillator is above the neutral line. It is also along the upper line of the Bollinger Bands. Therefore, the pair may keep rising as bulls target the next key level at 1.3778.
The EUR/USD pair rose to an intraday high of 1.1780. On the hourly chart, this pair seems to be forming a bearish flag pattern. It is also slightly below the short and medium moving averages and the important resistance at 1.1800. It is also slightly below the alligator indicator that is shown in blue. Therefore, the pair may resume the downward trend with the next key target being at 1.1700.
The USD/CHF continued to rise as the market reflected the stronger US dollar environment and the recent Swiss National Bank (SNB) decision. On the four-hour chart, the price is still above the 25-day and 15-day moving averages. It also moved above the important resistance level at 0.9375 while the Relative Strength Index (RSI) is slightly above the overbought level. Therefore, the pair may keep rising as bulls target the next key support at 0.9450.