The GBP/USD pair fell as low as 1.5411 during the American afternoon yesterday, following BOE’s Governor Mark Carney speech on the economic impact of a possible ‘Brexit.’ Despite he made no references to economic policies in the UK, Carney highlighted the positive effects of belonging to the EU, and said that the Bank may need to adjust its monetary policy accordingly to the result of the referendum.
The UK will release its September Retail Sales figures for September this Thursday, expected to have risen by 0.4% from a previous monthly reading of 0.2%.
The Pound may get a boost from better-than-expected readings, but the latest decline, with the pair now pressuring the lows of its latest range, increases chances of a downward continuation for this Thursday.
The 1 hour chart presents a mild negative tone, with the price now extending below its 20 SMA and the technical indicators in negative territory, albeit lacking directional strength.
In the 4 hours chart, the price failed to sustain gains on an early advance spike above its 20 SMA, whilst the technical indicators turned south and maintain strong bearish slopes in negative territory, in line with further declines.
Our preference: Long positions above 1.541 with targets @ 1.548 & 1.551 in extension.
Alternative scenario: Below 1.541 look for further downside with 1.537 & 1.5325 as targets.
Comment: The RSI is mixed and calls for caution.