The Great Britain Pound (GBP) rallied against the US Dollar (USD) on Thursday, increasing the price of GBPUSD to more than 1.2500 following some key economic news. The technical bias has turned bullish after the emergence of bullish engulfing candle a couple of days ago.
Technical Analysis
As of this writing, the pair is being traded near 1.2514. A hurdle may be noted around 1.2639 (the trendline resistance area) ahead of 1.2700-1.2706 (the high of last major upside move & psychological number) and then 1.2774 (the high of December 6th, 2016) as demonstrated in the given below daily chart.
On the downside, a support can be noted around 1.2200 (a short term horizontal support area as well as psychological number) ahead of 1.2109 (low of the bullish engulfing candle emerged on Wednesday) and then 1.1986 (the low of 2017).
UK Retail Sales
UK retail sales posted a 1.4% rise in February from the previous month, but there are signs that higher fuel prices have begun to hit shoppers’ pockets. In the three months to February, sales volumes fell by 1.4%, a sharper slide than the 0.5% decline for the three months to January. That was the biggest three-month fall recorded by the Office for National Statistics (ONS) since March 2010. Fuel prices in February were 18.7% higher than a year earlier.
Trade Idea
Considering the overall technical and fundamental outlook, buying the pair around current levels appears to be a good strategy in short to medium term.