The British pound rallied strongly against the US dollar yesterday, clocking in the most gains among major currencies. GBPUSD started the week at 1.2849 and steadily traded higher to 1.2910. By the end of Monday, the currency pair was up 65 pips.
Yesterday’s forex news gave the pound some much-needed support. The CBI Realized Sales report printed at -3 which was significantly better than the expected -10 reading. In fact, this is the best reading we have seen since May 2019. The report is widely said to be an accurate indicator of the government’s official data on consumer spending. Therefore, it may have eased concerns about the effects of Brexit slowing down the economy which caused the pound’s sell off on Friday.
It also helped that polls continue to show that Conservatives are maintaining a strong lead over Labour ahead of the general elections next month.
For today, only one third-tier report is scheduled for the pound at 9:30 am GMT. Data on the number of mortgages approved by High Street banks for October is eyed to print at 43,100. There are, however, a handful of economic data due from the US which could have a bigger effect on GBPUSD today.
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GBPUSD Outlook
GBPUSD is still trading within the 200-pip range that I pointed out yesterday. Using the Fibonacci retracement tool from the high of November 21 to the low of November 22, we can see that the currency pair is finding resistance around the 50% Fib level. The area also coincides with a previous low.
If data from the UK tops expectations, we could see a strong close above 1.2900 which could be the start of the pair’s rally to the top of the channel at 1.2976. On the other hand, a bearish candlestick could mean that GBPUSD is on its way to support at the bottom of the range at 1.2789.Download our latest quarterly market outlook for our longer-term trade ideas.
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