British pound (GBP) price outlook
- Positive retail sales and PMI releases.
- GBP / USD may be shifted higher before US data transfers.
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How to trade GBP / USD
Data issued earlier in the session should help raise British pound and pause the recent slide. The retail sales indicators in March easily exceeded expectations, compared to the same period of the previous year, this indicator was 7.2%, compared to the market expectations of 3.5% and the previous month’s reading of -3.6%. Although retail figures may fluctuate, today’s issue adds fuel to the story of economic recovery.
The latest UK PMI data (April) also gives the UK a positive picture as companies report that “demand for both goods and services is increasing as the economy opens up due to closures and encouraging vaccine introduction adds brighter prospects” to Chris Williamson, chief economist at IHS Markit. The Composite PMI reached a 89-month high of 60, the services figure reached an 80-month high of 60.1, and the manufacturing index reached a 321-month high of 60.7.
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GBP /USD is currently trading at around 1.3875 and may appear to be rising above US open and US PMI publications. Recent US economic pressures continue to exceed expectations as the US economic recovery accelerates. Next week is a crowded calendar of economic and events, with the Federation’s latest decision and the first review of US first-quarter GDP prominent. Positive shocks in the US next week could slow any GBP / USD rally.
For all economic data and events in the market, see DailyFX economic calendar.
The recent double-bottomed pattern is likely to remain on the daily chart at around 1.3670, supported by a medium-term uptrend, while the cable will also receive short-term support based on a 20-day simple moving average. A break over a cluster of the last vertices around 1.4000 is likely to require a strong leader for a convincing breakthrough.
GBP / USD daily price chart (September 2020 – April 23, 2021)
customers are network long.
customers are net short.
Retailer details show 56.34% of traders are net long, the ratio of long to short traders is 1.29: 1. The number of net long traders is 14.00% higher than yesterday and 15.77% less than last week, while the number of net short traders is 17.66% higher than yesterday and 6.89% higher than last week.
We usually view the contradictory situation of the crowd and the fact that traders are net long indicates a continued decline in GBP / USD prices.. Positioning is longer than yesterday, but less than last week. The combination of the current mood and recent changes gives us even more mixed GBP / USD trading bias.
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What is your view GBP / USD – bullish or bearish ?? You can notify us via the form at the end of this section or you can contact the author Twitter @ nickcawley1.