It has been a busy week for sterling traders, with two key data releases already out and another due today to close out the week. The employment data offered mixed results, showing higher claimant numbers but a lower unemployment rate. However, the inflation figures hit the pound hard, as both CPI and PPI came in well below expectations. Today’s retail sales numbers are expected to show a 0.4% month-on-month decrease. Should the data fall further below this forecast, it could exacerbate the negative sentiment from the inflation figures and push Cable lower, especially given the dollar’s recent strength.
Cable is currently hovering just above the 1.3000 level, having found some support near 1.2970 over the past few sessions. Traders will note that technical levels on the hourly chart present good opportunities for both bears and bulls, depending on how the data is released. A weaker print will likely see recent lows and trendline support tested quickly, potentially continuing the current downward trend. Conversely, stronger data could reverse the market, with short-term resistance positioned close to current levels, including the trendline and the 200-Day Moving Average.
Resistance 2: 1.3056 – 200 Day Moving Average
Resistance 1: 1.3036 – Trendline Resistance
Support 1: 1.2972 – October Low and Trendline Support
Support 2: 1.2895 – Longer-term Trendline Support
