Cable Awaits Key Data As Sellers Remain In Control

The British pound mostly traded lower during this week against the US dollar. The 1.5910-20 level acted as a strong barrier for the GBPUSD pair on a number of occasions. There was only one release in the UK recently i.e. the BRC Retail Sales Monitor which managed to register a better than expected reading and helped the GBPUSD pair to some extent. The pair mostly traded in a range with a support around the 1.5840-20 levels.

However, there are several important releases lined up during the London session today, which might impact the British pound to a greater extent. These releases include the UK employment data and BOE quarterly inflation report. Both these events have a potential to cause a lot of moves in the British pound. Let us analyze some of the recent releases and scheduled releases.

UK BRC Retail Sales Monitor
The first important release in the UK was the British Retail Consortium (BRC) Retail Sales Monitor. The forecast was slated for a decline of 0.5%, compared with the last time decline of 2.1%. However, the outcome was better than expected as the BRC Retail Sales Monitor remained flat at 0%. When we compare it with the previous year, then there was a gain of 0.8% in October 2013. The report mentioned that “on a total basis, sales were up 1.4%, against a 2.6% rise in October 2013. This was an improvement on the previous month and beat the three-month average growth of 1.0“.

There was not much of an impact on the GBPUSD pair, as it mostly traded in a range as mentioned earlier. However, the releases which are lined up today might act as a catalyst for a break in the near term.

UK Employment Report
One of the main releases this week is the UK employment report. The UK Claimant Change, Average Earing Excluding Bonus Claimant Count Rate and ILO Unemployment Rate will be released by the National Statistics. The forecast is slated for an improvement this time, as the UK Claimant Change is expected to dip by -22K, and the most important thing is that the unemployment rate is expected to fall by 0.1% from 6.0% to 5.9%. So, there are a lot of expectations this time around and if the outcome fails to match, then the GBPUSD pair might come under severe pressure in the short term.

Alternatively, if the outcome stays in line with the expectation or exceeds it, then we might witness strong buying interest in the British pound.

US NFIB Business Optimism Index
There was only one release recently in the US i.e. the National Federation of Independent Business (NFIB) Small Business Optimism Index was released. The outcome was positive as there was an increase from the last reading of 95.3 to 96.1 in October 2014.

Technically, the GBPUSD pair has a solid resistance around the 1.5920-40, which must be breached if the pair has to continue trading higher. If in case it fails to break higher, then a risk for more losses in the near term would escalate. On the downside, a break of 1.5820-10 would be significant.

So, keep an eye on all the important levels friends and trade accordingly.

Get my Daily Market forecast with trade opportunities HERE: Vladimir’s Markets Forecast

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