Key Points
- The Euro was crushed vs the British Pound, as the EURGBP pair traded below the 0.7700 support area.
- There was a contracting triangle pattern break noted on the 4-hours chart of the EURGBP pair, which ignited a downside move.
- UK Retail Sales released by the National Statistics posted a rise of 4.3% in April 2016, which was more than the forecast of 2.5%.
- In terms of the monthly change, there was a rise of 1.3%, compared with the forecast of 0.5%.
Technical Analysis
The Euro tumbled vs the British Pound recently, and broke a major support area of 0.7700. Moreover, there was contracting triangle pattern break noted on the 4-hours chart of the EURGBP pair.
After the break, the pair traded as low as 0.7650, and currently attempting to move higher. It may find resistance near the 23.6% Fib retracement level of the last drop from the 0.7856 high to 0.7650 low.
On the downside, a break of the last low of 0.7650 may call for a move towards the 0.7600 handle.
UK Retail Sales
Today in the UK, the Retail Sales, which measures the total receipts of retail stores was released by the National Statistics. The market was expecting the monthly rate of changes of such sales to increase by 2.5% in April 2016. However, the outcome was better, as the retail sales increased by 4.3%.
The report added that “Compared with March 2016, the quantity bought in the retail industry is estimated to have increased by 1.3%. Average store prices (including petrol stations) fell by 2.8% in April 2016 compared with April 2015”.
In short, the British Pound got a reason to move higher, and there are high chances of it continuing higher vs the Euro.
