GBP/USD Gains Ground Ahead Of Retail Sales Data

Key Insights

• UK Consumer Confidence declined to new lows. 
• UK Retail Sales report may have a material impact on GBP/USD dynamics. 
• A move above the 20 EMA will push GBP/USD towards the resistance at 1.3230.

British Pound Rebounds Against U.S. Dollar

GBP/USD is currently trying to settle back above the 20 EMA at 1.3205, while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index has managed to settle below the support at 98.70 and is trying to get to the test of the next support level at 98.35. If the U.S. Dollar Index declines below 98.35, it will head towards the 20 EMA at 98.15, which will be bullish for GBP/USD.

Today, the UK released Gfk Consumer Confidence report for March, which indicated that Consumer Confidence declined from -26 in February to -31 in March, compared to analyst consensus of -30.

Foreign exchange market traders will also have a chance to take a look at UK Retail Sales data for February. Analysts expect that UK Retail Sales increased by 0.6% month-over-month in February after growing by 1.9% in January. On a year-over-year basis, Retail Sales are projected to increase by 7.8%.

Technical Analysis

GBP/USD is testing the resistance at the 20 EMA at 1.3205. In case this test is successful, GBP/USD will move towards the next resistance level, which is located at 1.3230. RSI remains in the moderate territory, and there is plenty of room to gain additional upside momentum in case the right catalysts emerge.

If GBP/USD settles above 1.3230, it will head towards the resistance level at 1.3270. A move above this level will push GBP/USD towards the resistance at 1.3300.

On the support side, a move below the 20 EMA will push GBP/USD towards the support at 1.3175. If GBP/USD declines below this level, it will move towards the next support level at 1.3140. A successful test of the support at 1.3140 will push GBP/USD towards the next support at 1.3110.

For a look at all of today’s economic events, check out our economic calendar.