The cable or the GBPUSD pair has been staging a nice rebound for the past couple of weeks after it touched a low of 1.4227 last May 20. From my previous post about the cable last May 28, I mentioned that if and when it moves past 1.4600, it could reach 1.4800. At present, the pair is already trading around that area. And as I’ve said, it could experience some selling pressure at this level. With the stochastics now in the overbought territory, the pair could indeed turn around and move lower in the next coming days. Once it does, it could aim for its 2010 low again. On the other hand, the pound bulls could still meet a lot of resistances at the three Fibonacci retracement levels just above 1.4800, 1.4900, and 1.5050, and even at the downtrend line even if it is able to close above 1.4800. So until it breaks the downtrend line and reverses, my sentiment towards the sterling pound is still bearish. But that’s just me.
On the fundamental side, the pound’s movement for today will take cue from the result of the UK’s retail sales performance in May. The UK’s headline retail sales are seen to have grown by a mere 0.1% after rising by 0.3% in April. A worse than projected number would more likely push the GBP lower. For the first time in the last three months, the UK’s inflation cooled off in May. This could suggest that the demand for goods and services for the same period could have slowed as well. Such could likewise translate to a weak retail sales figure for the month.