GBP/USD back close to 1.4600 ahead of US data

Following a bullish spike to 1.4663 after monthly retail sales print pointed to a solid rebound in April, the GBP/USD pair erased some gains and has now moved back closer to 1.4600 handle at 1.4615.

The pair regained momentum above 1.4600 handle after UK retail sales surprised market by reversing a 1.3% decline recorded in March to post a solid growth of 1.3% for April. With declining fears of 'Brexit', strong retail sales print coupled with Wednesday's better-than-expected jobs report prompted further bullish momentum beyond 1.4600 handle.

However, Wednesday's minutes from the Fed meeting in April have now increased the prospects of a June rate-hike, which might now act as a headwind for the GBP/USD bulls. Further, US weekly jobless claims along with the release of Philly Fed manufacturing index and speech by FOMC’s W.Dudley could add to the ongoing bullish sentiment surrounding the greenback, which might eventually force trades to lighten their GBP bullish bets.

Technical outlook

Nenad Kerkez, Analyst / Full Time Trader, Admiral Markets notes, "Technically we can see rising MACD, and confluence within first POC that is 1.4600 zone (pennant breakout , 23.6, round number ) and traders should watch for a possible bounce at the zone."

"POC2 is 1.4520-35 zone where we see a confluence - DPP, L3, 50. Below is a strong support 1.4500 with 61.8 and EMA89. If we see another rejection targets should be 1.4660 and only on 1h momentum break or 4h candle close above H4 cam pivot - 1.4725 we could see 1.4830."

"1.4500 should stay firm else the pair is back in a range with a downtrend potential."