A familiar story for cable after testing the highs this year
GBP/USD retreats once again after threatening a break of the highs this year
Last Friday's rally heading into the US session was a solid one, but ultimately it faltered when we closed the trading day/week.
It's one that is a familiar tale for cable, failing on several occasions so far this year to firmly break above the 76.4/23.6 retracement level @ 1.4268 on the daily chart. It's a level that the pair has still struggled to find a daily close above, and a level that has so far putting a cap on the pair's upside movement this year. Here's a clearer picture of the daily levels:
Looking at the bigger picture, there is also the 200-week MA (shown below) that is acting as a resistance level for the pair - so a close above that will help sterling's case for a bullish run against the dollar.
Unfortunately things are not as straightforward as that. For the week we'll have a couple of key risk events for sterling and that is the UK jobs report tomorrow and the UK inflation report on Wednesday. Following which, we will also have the retail sales data due on Thursday.
As for the dollar side of the equation, today we will have retail sales data and then there is a host of Fed speakers throughout the week. In terms of data points, I don't believe any of the others will matter all too much - but of course there is the Trump/political risk factor to consider as well.
But for now, the pair remains capped near the highs and unless there is a clear catalyst to push it higher this will prevent any further upside movement for the time being.