Key Points
- The British Pound surged after testing the 1.2420 support against the US Dollar.
- The GBPUSD pair is currently finding sellers near a bearish trend line with 1.2590 resistance on the hourly chart.
- Today in the UK, the British Retail Consortium (BRC) Shop Price Index was released.
- The result was on the lower side, as there was a decline of 1.7% in the index in Jan 2017.
GBPUSD Technical Analysis
The British Pound recently traded towards the 1.2400-1.2420 support area against the US Dollar where it found support and traded higher. The GBPUSD moved above the 21 hourly simple moving average, and currently trading near a bearish trend line with 1.2590 resistance on the hourly chart.
There is a high chance that the pair may break the resistance at 1.2590 and move towards 1.2600. Above 1.2600, the next resistance is at 1.2620.
On the downside, the pair has a support at 1.2540-1.2550, which also represents a pivot area for GBPUSD.
British Retail Consortium (BRC) Shop Price Index
Today in the UK, the British Retail Consortium (BRC) Shop Price Index, which measures price changes in the popular retail outlets in the UK was released. The market was looking for no major decline in Jan 2017, compared with the last rise of 1% (now revised to -1.4%).
However, the result was on the lower side, as there was a decline of 1.7% in the index in Jan 2017. In the report, the Chief Executive, British Retail Consortium, Helen Dickinson OBE, stated “January bucked the monthly trend of an easing in shop price deflation, with prices down 1.7 per cent compared to January 2016; a larger year on year fall in shop prices than the 1.4 per cent fall in December”.
Overall, there is no major reason for the GBP to move down, which is why it may trade higher above 1.2600 in the short term.
