GBP/USD Hit By FOMC Minutes And Weak Retail Sales Data
- The GBP appreciated yesterday after minutes from the Bank of England's own last policy meeting showed the first dissenting votes on its policy committee for a rise in interest rates. However, hawkish message from the Fed sent the USD higher across the board.
- Weaker-than-expected retail sales data released today added to the pressure on the GBP. Retail sales grew in July at a weaker pace than expected (0.1% mom and 2.6% yoy vs. market consensus of 0.4% mom). The Office for National Statistics saidtwo out of the four main retail sectors (non-store retailing and non-food stores) had seen an increase in the quantity bought (volume). The largest contribution came from the non-food stores sector. The negative contribution was recorded in food and fuels.
- We see that retail sales data excluding food and fuels are not that bad and still solid consumption of durable goods is a good sign. Despite hawkish BoE's minutes yesterday we do not see three more members of the council voting for a rise in rates in November. However, the nearest macroeconomic data will be of key importance regarding further monetary policy.
- At GrowthAces.com we used current GBP/USD levels to go long. We are long at 1.6580 with the target of 1.6710 and stop-loss at 1.6535.
Significant technical analysis' levels:
Resistance: 1.6599 (hourly high Aug 21), 1.6680 (200-dma), 1.6695 (10-dma)
Support: 1.6555 (low Apr 4), 1.6460 (low Mar 24), 1.6453 (38.2% 1.5854-1.6823)
GROWTHACES.COM TRADING POSITIONS:
- USD/CAD: long at 1.0905, target 1.1070, stop-loss 1.0925 (we have moved the stop-loss from 1.0840 previously)
- GBP/USD: long at 1.6580, target 1.6710, stop-loss 1.6535
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