GBP/USD Produces Modest Loss Following UK Retail Sales Data

GBP/USD is modestly lower in today’s trading, holding near the 1.2778 level, a loss of 0.27% from Thursday’s North America close.

The pair appears to be extending the consolidation which followed Tuesday’s surge to the upside. However, it appears the consolidation represents a flag formation, which has bullish implications. The longer-term target is at the 1.3400 level, which is based on the breakout from the symmetrical triangle that took place this week.

However, a negative divergence formed between price action and the Stochastic during the latest move to the upside, warning that a period of weakness would take place following Tuesday’s move higher.

Support, should selling become more intense, is at the mid-point of Tuesday’s long green candle, near the 1.2700 level.

In today’s trading, it was reported that headline UK retail sales volumes declined 1.8% in March compared with expectations for a 0.2% drop for the month. However, the February increase was revised up 1.7% from 1.4%. Annual growth slowed to 1.7% from 3.7% previously and an expected gain of 3.4%.

In the US today, Existing Homes Sales will be reported at 10:00 ET.

GBP/USD Daily Chart

Tracy L. Morganthall, CMT, has been a Technical Market Analyst for more than 20 years. She has experience analyzing and producing reports on equities, both domestic and international markets, as well as Forex and commodities. She attended Trenton State College in Trenton, New Jersey, earning a Bachelor's in Finance.