GBP/USD looks to 1.39 after upbeat retail sales and before PMI numbers. Dax hovers around its all time high, with US tax hikes & German PMI figures due.
GBP/USD tests 50 EMA resistance after strong retail sales
Retail sales data showed that spending ramped up as consumers looked ahead to the reopening of the united kingdom economy.
Retail sales came in 5.4% MoM in March vs 1.5% expected and a couple of .1% in February. On an annual basis sales rose 7.2% in March against 3.5% expected and -3.6% previously.
UK PMI data for April are going to be in additional closely eyed because it will provide clues on how the economy skilled the reopening in April. Expectations are for the service sector PMI to hit 59 in April.
Weakness within the US Dollar is seen because it gives back yesterday’s gains on Biden tax reports and stronger than forecast initial jobless claims.
US PMI data is due later.
Where next for GBP/USD?
GBP/USD has pushed back over its descending trendline dating back to late February. it’s attempting to retake the 50 EMA on the 4 hour chart, which holds just above the 100 EMA.
A move above this level could see the pair plan to take 1.3885 a swing low from Thursday before targeting 1.3950 and 1.4010.
Support are often seen at 1.3820 the daily low followed by 1.38 the round number which has acted as both a support and resistance this month.
European bourses look set for a softer open after a lower close on Wall Street.
Concerns of upper US taxes on reports that the White home is mulling over a considerable hike to capital gains taxes for higher earners has sent stocks southwards.
Yesterday the ECB retained their dovish slant.
German & European PMI data is focused . The composite reading for both is predicted to tick slightly lower but remain in expansionary territory.
Where next for the Dax?
The Dax trades above the upper band of the ascending channel which dates back to December. The Dax also trades above its 20 & 50 EMA suggesting that its in an upward trend.
However more recently the trend has run out of steam and that we are seeing some consolidation at these levels.
The upper band of the channel held as support earlier within the week. This upper band continues to off er immediate support at 15134 which is additionally the confluence with the 20 EMA and horizontal support across April. this might prove a troublesome nut to interrupt .
A fall below here could open the door to 14800 the late March high followed soon after by the 50 EMA. it might take a fall below this level to negate the present uptrend.
Any mover higher would wish to require 15360 high March 31, so as to seem northwards towards the all time high of 15515. Beyond here there’s no resistance to talk of but round numbers could become targets.