Key Highlights

• The British Pound recovered well after trading a few pips below the 1.2600 handle against the US Dollar.
• The GBP/USD pair is correcting higher, but faces a crucial resistance on the upside near 1.2850.
• Recently in the UK, the CBI Distributive Trades Survey – Realized for June 2017 was released, which posted a solid increase of 12% (MoM).
• Today in the US, the Pending Home Sales for May 2017 will be released, which is forecasted to increase by 0.5% (MoM).

GBPUSD Technical Analysis

The British Pound after declining below 1.2600 this past week versus the US Dollar formed a support base. The GBP/USD pair is currently recovering, but likely to struggle near the 1.2850 resistance.

During mid June 2017, the pair broke a bullish trend line on the 4 hours chart and traded as low as 1.2588. Later, it started an upside move, and moved above 38.2% Fibonacci retracement level of the last drop from the 1.2977 high to 1.2588 low.

The upside move looks positive, as the pair traded above the 100 simple moving average (H4) and the 1.2800 handle. However, the 200 SMA and a bearish trend line around 1.2850 is acting as a hurdle.

Furthermore, the 61.8% Fibonacci retracement level of the last drop from the 1.2977 high to 1.2588 low at 1.2829 is also acting as a barrier for buyers. It seems like it won’t be easy for GBP/USD to break and settle above 1.2850 60 in the near term.

UK’s CBI Distributive Trades Survey

Recently in the UK, the CBI Distributive Trades Survey – Realized was by the Confederation of British Industry. The forecast was lined up for a minor increase of 2% in June 2017, compared with the previous month.

However, the actual result was much better, as there was an increase of 12%. The report stated that “The survey of 115 firms, of which 59 were retailers, showed that the volume of sales and orders placed upon suppliers grew modestly – exceeding expectations in both cases – in the year to June”.

Overall, the outcome was positive, which helped in improving the market sentiment for GBP/USD and the pair traded sharply higher towards 1.2850, but struggling to break it.

Economic Releases to Watch Today

• German Import Price Index for May 2017 (YoY) – Forecast +4.6%, versus +6.1% previous.
• Italian Consumer Price Index for June 2017 (YoY, Prelim) – Forecast 0.0%, versus +1.4% previous.
• US Pending Home Sales for May 2017 (MoM) – Forecast +0.5%, versus 1.3% previous.
  • US Pending Home Sales for May 2017 (YoY) – Forecast 2.1%, versus 3.3% previous.