GBPUSD LOOKS TO UK RETAIL SALES AND BOE MEETING

The GBPUSD pair had a muted reaction to the Federal Reserve rate increase, with the policy statement delivered by Janet Yellen having a greater impact on pricing. After an initial move to 1.2817, the pair finished the day only slightly positive, closing around the 1.2750 region.

British pound traders focus now turns to UK retail sales data, which are expected to drop sharply to -0.9% this month, against the April 2.3% monthly increase.

The Main risk event remains the Bank of England interest rate decision and minutes release, with speculation mounting that a 2017 rate increase is out of the question for now, as inflation continues to overshoot the BOE’s target.

In the short term the pair remain bullish whilst trading above near term support, located in the 1.2730-40 region.

A loss of the 1.2730 support area should trigger selling towards 1.2710 and 1.2695.

To the upside, the 1.2780-90 becomes the closest meaningful resistance for the pair.

In the medium term the pair remains bullish whilst clearly holding the 1.2697 pivot point, with intraday resistance currently located at 1.2817 and 1.2840.