Cable buyers to keep their eye on the prize as retail sales data provides no fireworks


GBP/USD holds steady just under 1.2500 currently

GBP/USD D1 19-09

The data was a bit of a mixed one with sluggish headline readings but more upbeat revisions to July. Overall, it wasn’t a bad report as consumption activity stayed modest in early Q3 and that should be supportive to the economy amid flagging business investment.

Either way, I briefed earlier that retail sales was never going to be a major factor as the release today will not influence the BOE/Brexit outlook whatsoever. As such, the reaction here isn’t overly unexpected and all this does is just reaffirm the above sentiment.

As for the pound, the data doesn’t change much as cable continues to do battle with key resistance levels close to the 1.2500 handle. Buyers are still running into key resistance from the 100-day MA (red line) @ 1.2495 and the 38.2 retracement level @ 1.2502.

As price continues to hug current levels, it shows that buyers are continuing to “keep their eye on the prize” as they eye a break above those key daily resistance levels.

So far, any downside remains limited by the 100-hour moving average this week and buyers leaned on that level again several times since overnight trading. That currently sits at 1.2462 and continues to act as a level for buyers to define and limit risk in cable.

Eventually, we will see price break out on either side of the levels mentioned and the next trade from a technical perspective will be to run with it as we also continue to wait on more concrete Brexit developments over the next few weeks.

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