Pound rise to a new weekly high today after USA CPI data, yesterday the latest UK employment report showed that headline wages ticked up to 3.1% for the three months to April, while the ex-bonus measure – at 3.4% 3m/y, was also stronger than analyst’s estimates. The UK economy contracted 0.4% in April, while manufacturing and industrial production also recorded steep declines on monthly and yearly basis. The pair hit the daily high at 1.2757 but retreated back to the middle of the recent range.
On the technical side the pair continues to consolidate around the 1.27 zone for second week in a row from 1.2690 to 1.2740 even today extended the upper bound. The pair will find support at the daily low at 1.2712 which if breached can accelerate the downward move down to 1.26 round figure. The final support stands at 1.2551 the low from end of May. On the upside first resistance stands at daily high up to 1.2757, a strong close above that area can lead prices to May 21st high at 1.2815, while more offers will emerge at 1.2880 the 50 day moving average. The Intraday bias is neutral for the pair while the longer term outlook is negative amid persistent Brexit uncertainties.