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GBP/USD Outlook: Bears Pause Above Daily Cloud, UK Retail Sales Eyed For Fresh Signal

Cable is consolidating above daily cloud top in early Friday’s trading following heavy losses in past two days.

UK parliament voted down PM May’s Brexit plan again on Thursday, increasing concerns over likely no-deal Brexit and adding pressure on sterling, which holds in a downtrend for the third straight week.

Brexit remains pound’s key driver, with divided forecasts from top market participants about the eventual outcome, increasing uncertainty and keeping sterling highly volatile.

Bears are taking a breather above thick daily cloud, top of which was cracked on Thursday but without clear break.

Close below 55SMA was negative signal as daily MA’s turned to full bearish setup, but momentum turned higher, deeply in negative territory and stochastic broke again into oversold zone.

This suggests bears may hold in extended consolidation, with stronger upticks expected on upbeat UK retail sales data, due today.

Retail sales are expected to rise 0.2% m/m in Jan vs -0.9% in Dec and y/y is forecasted at 3.4% in Jan vs 3.0% previous.

Better than expected release could boost pound for test of 1.2844 (lows of Wed/Mon), possibly to extend to 100SMA (1.2880) on stronger acceleration.

Bearish bias would remain intact while 100SMA caps and would keep focus at daily cloud top, violation of which would generate fresh bearish signal for test of 1.2710 (Fibo 61.8% of 1.2397/1.3217).

Res: 1.2882, 1.2844, 1.2880, 1.2898
Sup: 1.2786, 1.2772, 1.2710, 1.2668

Windsor Brokers Ltd
Windsor Brokers Ltdhttp://www.windsorbrokers.com/
The information contained in this document was obtained from sources believed to be reliable, but its accuracy or completeness cannot be guaranteed. Any opinions expressed herein are in good faith, but are subject to change without notice. No liability accepted whatsoever for any direct or consequential loss arising from the use of this document.

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