GBP/USD has failed to hold above 1.38 as the dollar gained fresh ground. Despite upbeat prospects for Britain, sterling is set to succumb to America’s shopping spree, according to FXStreet’s Analyst Yohay Elam.
US Retail Sales will likely dominate trading, overshadowing Britain’s reopening
“US Retail Sales is set to reveal about Americans’ buying in March. While expectations are already high at around a 5% bounce, uncertainty is high and a greater leap may be seen. Armed with another round of stimulus checks – $1,400 in March after $600 in January – a double-digit leap in expenditure cannot be ruled out. That may give the dollar another boost.”
“Federal Reserve’s leaders mentioned tapering bond buys, saying it would come before raising rates. The Fed is buying $120 billion worth of bonds and mortgage-backed securities per month and any reduction in the flow of funds may cause jitters in markets – a ‘taper tantrum.’ If fewer dollars flow into markets, the currency may rise in value.”
“Critical resistance awaits at 1.3810, which is the weekly high and a level that had previously capped cable. It is followed by 1.3850 and 1.3920.”
“Support awaits at 1.3750, the bottom of the current range, followed by 1.37 and 1.3670 – the latter is a crucial level.”