The GBP/USD pair dropped from above 1.41 this week on the back of higher inflation in the United States than anticipated. Yet, the pair has found support at the 1.40 level and now looks bid at the start of the last trading day of the week.
Earlier in the trading week, the Preliminary GDP data was released in the United Kingdom. It showed that the economy contracted in the first quarter of the year, but not as much as expected. Hence, the positive data made it so that the GBP/USD traded with a bid tone, despite declining after Wednesday’s US inflation.
Speaking of the US, Retail Sales in the United States is the main piece of economic data today. Judging by yesterday’s strong bounce from the lows seen in the US equities, the expectations are that the data will beat the consensus. If that is the case, the GBP/USD pair remains bid, especially since the first attempt at the 1.40 was rejected.
GBP/USD Technical Analysis
The 1.40 level proves to be pivotal for the GBP/USD pair. While above, it will try to make a new high, a typical move during a rising market. If it fails, traders will focus on a reversal pattern.
Bears may want to place a pending order to sell below 1.40 with a stop at 1.41 and a take profit at the 1.38 area.