The British pound is steady, but could receive a boost if retail sales delivers a solid gain (release on Friday at 9:30 GMT). The story of the week has been the Chinese yuan, which has climbed to a 7-month high against the U.S. dollar.
GBP/USD is trading sideways in the Thursday session. Currently, the pair is trading at 1.3039, up 0.02% on the day.
The pound dipped below the symbolic 1.30 level on Tuesday, the first time that has occurred this year. However, the currency has since plodded higher with small gains and is within striking distance of the 1.31 line.
It has been a rough week for British indicators, but the pound has still managed to hold its own against the U.S. dollar. The week started with a soft GDP report, showing that the British economy declined 0.3% in November. There was no relief on the inflation front, as consumer inflation slowed to just 1.3% in December. This marked the lowest level since November 2016. Inflation was running at a healthy clip of 2.0% in mid-2019, but dropped sharply in the second half the year, as the British economy has been struggling. Will retail sales salvage a rough week? Analysts expect a strong rebound in December, after back-to-back declines. The estimate stands at 0.5 percent.
The pair broke above resistance at 1.3050 on Thursday. Above, we find resistance at 1.3100. On the downside, the 50-EMA line is situated at the key support level of 1.300. Earlier in the week, the 50-EMA intersected with the candlesticks, and the pair has moved upwards since then. Below, there is support at 1.2950, which faced strong pressure early in the week.
The Chinese yuan has rallied this week gaining close to one percent. Currently, USD/CNY is trading at 6.8545, down 0.33% on the day. This is the pair’s lowest level since July.
Investors seemed pleased with China’s GDP for the fourth quarter, as the growth rate remained unchanged at 6.0%. This matched the estimate. Industrial Production was strong, with a gain of 6.9% in December, up from 6.2% a month earlier.
With no major Australian indicators this week, AUD/USD has been steady, as it hugs the 0.6900 line. The pair is currently trading at 0.6906, up 0.13% on the day.
NZD/USD is slightly higher on Friday. Currently, the pair is trading at 0.6646, up 0.15% on the day. There are no New Zealand events on the schedule, so traders can expect a quiet Friday session for the pair.
Kenny is an experienced market analyst, with a focus on fundamental analysis. Kenny has over 15 years of experience across a broad range of markets and assets –forex, indices and commodities.
