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GBP/USD's Double Bottom Attempt Continues after Retail Sales Data

The GBP/USD started to form a double bottom after the BoE released its meeting minutes yesterday. The market felt it was not as dovish as some expected. Today, UK retail sales data surprised and is helping GBP/USD continue its effort in a price bottom.

In October, UK retail sales grew 0.8%, rebounding from a -0.4% reading in September. Forecasts called for a 0.4% print. The better-than-expected reading was driven partly by furniture sales which reflect a a pick up in the housing market earlier in the year. It should be noted that the retail sales data is volatile, so we should not expect any material impact on the GBP. Still it is helping GBP/USD in the intra-session sense. 

GBP/USD 1H Chart 11/20

(click to enlarge)

The 1H chart shows cable drifting above the 100-, and 50-hour SMAs after bounding off 1.5590. Then after the retail sales data today it looks poised to come up to the 1.5735 level, which is a previous resistance pivot and where the 200-hour SMA resides at the moment. 

A break above 1.5735 would complete a double bottom. The bottom is about 145 pips wide. A projection of 145 pips upon a break above 1.5735 puts the 1.5980 level in sight.

On daily chart we can see that there is indeed resistance around 1.60, but we can also expect sellers below that. Even before teh 1.5944 resistance pivot, GBP/USD would be tested by a falling trendline coming down from the 1.7191 high on the year. 

Now, a break above 1.6050 might shift the GBP/USD from a bearish mode to a neutral one because it would break above the falling trendline and some recent pivots.

GBP/USD Daily Chart 11/20

(click to enlarge)