© Dukascopy Bank
Despite the EUR/USD pair, the cable posted solid gains last week, appreciating 255 pips over the period. Sterling strongly advanced taking advantage of the risk-on mood on financial markets, while the US dollar index fell toward its lowest level since August 2015. In the middle of the week, the pound slightly edged lower, since the UK Office for National Statistics announced that retail sales fell 1.3% in March, compared to the prior 0.5% drop whose figure was revised from the original 0.4% decrease. Meanwhile, analysts had expected retail sales to slip 0.1% last month. On Friday, the cable was seen advanced as the sterling recovered from yesterday's retail sales, but the powerful $1.44 resistance level still was not reach. Luckily for pound, the lowered projection for Fed rate hikes in 2016 took some strength from the US dollar recently.
Majority of respondents claim the pair will depreciate over the period, while the pair is expected to finish the week at 1.423, just 16 pips lower from the last week's average price. However, keeping in mind the fact the pair was already trading lower at the moment of writing, bears can try to break daily S2 and S3 at 1.439 and 1.445, respectively. Moreover, market sentiment is strongly bearish (72%), while attitude towards the Sterling is bearish as well, with the currency being sold in 72% of all case across the board. Regarding the economic data, UK will release a first readout of first quarter gross domestic product on Wednesday as well as the Federal Reserve is to announce its benchmark interest rate and publish its rate statement in the same day.
© Dukascopy Bank