Buyers held a defense of the trendline support earlier today before moving back above the 100-hour MA (red line) once again. The upside move gathered some momentum going into the UK retail sales data release with price testing a high of 1.2867.
However, the data was once again disappointing and that is tempering with gains a little as buyers now look to try and hold price above the 200-hour MA (blue line) @ 1.2850.
If they can manage that, the near-term bias turns more bullish with further resistance seen towards 1.2872-74 and then closer to the 1.2900 handle.
While election sentiment is the major factor driving the pound right now, the softness in economic data (jobs, inflation, consumption) this week should not go unnoticed.
If anything else, this will lower the threshold for traders to start increasing easing bets by the BOE in the coming months - even as the Brexit fog is yet to be lifted.
That could yet come back to bite at the pound if we see further deterioration in the economy as traders continue to look past data releases in favour of Brexit for the time being.