GBP/USD: outlook for April 17-21
Sterling surged to 1.2575 in the course of the past week due to strong economic data out of the UK and lower USD. British manufacturers reported the fastest export growth in more than two years; UK consumer prices increased by 2.35 in March, average hourly earnings have finally edged up. Sluggish wage growth was cited as the major reason the Bank of England refuses to raise its interest rate despite surging inflation figures. The greenback was hit by Donald Trump punishing warlike countries for their military actions and talking down the nation’s currency at the latest press conference.
Next week pay closer attention to the Bank of England Governor Carney’s speech on Wednesday and Britain’s retail sales coming on Friday. From the US, we will get empire manufacturing index on Monday, building permits, housing starts and capacity utilization rate on Tuesday. On Thursday, keep an eye on the US manufacturing data, and don’t forget about the US Treasury Secretary Mnuchin’s speech scheduled for 8:15 pm MT time.
The technical outlook for the pair is bullish. It seems that sterling has time to regain its value before the official start of the EU-UK talks. On the upside, we see some strong resistances at 1.2575 (past-week high) and 1.2625 (200-day MA). A rollback is not ruled out, as the USD will probably try to win back its earlier losses. The immediate supports can be found at 1.2460,1.2415 (50-day MA) and 1.2380 (April 10 low).
