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