Technical Analysis

Cable refuses to break stride as traders weigh stronger dollar against upbeat UK data

UK retail sales holds firm in Q1 as March data beats expectations

ForexLive

But that isn’t enough to really generate much buzz in the pound with cable rising from 1.3010 levels to 1.3030 following the data release. Not that it’s much of a surprise as despite the data beat, pound sentiment remains largely dependent on Brexit at this point and the earlier release doesn’t really do much to change that picture.

Cable is still trading slightly lower on the day after the dollar caught a bid earlier as safety flows dominated after Germany and Eurozone PMI data disappointed expectations, reigniting global growth worries.

But more importantly, cable is still trapped in the triangle pattern awaiting a key breakout on either side. The downside trendline is seen at 1.3007 today while the topside trendline is at 1.3090. Those will be the two key levels to watch out for in the sessions ahead.

UK lawmakers will return from their Easter break next week so hopefully we’ll have fresh Brexit developments to help drive market direction. Otherwise, it’s hard to justify any technical breakout if Brexit headlines could easily swing it the other direction.

For now, I don’t see much upside for the pound on the back of the retail sales release. Light offers lurk around 1.3050 and that’s where I reckon sellers will prevail in any chase higher from here. Unless the dollar is offered later as haven flows dissipate, odds are cable will stay pressured to the downside today.

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