GBPUSD Defends 1.30 Support
16 March 2022
Sterling has managed to defend the critical 1.30 support and bounced higher today, strengthening nearly 0.5% during the US session.
On the macro data front, US retail sales came out weaker than expected, printing just 0.3% monthly for February, down from 4.9% previously. At the same time, the control group, used in GDP calculations, cratered to -1.2% from 6.7% in January. Finally, the ex-autos gauge decelerated from 4.4% to 0.2%.
On the other hand, yesterday's better than expected UK labor market data strengthened the Pound, which also benefited from optimism coming from Ukraine-Russia diplomatic talks.
Later today, volatility will indeed be elevated as the FOMC decision looms, and the Fed is expected to hike rates for the first time since the Corona crisis.
As previously said, the key support is now at 1.30, and while the Cable trades above it, the short-term outlook seems cautiously bullish. Investors could be taking some profits from the recent decline, which has brought the pair into heavily oversold territory.
On the upside, the GBPUSD pair must jump above 1.32, which is the crucial short-term resistance. The overall sentiment could improve notably if that occurs, possibly pushing the Pound toward the 1.33 level.
We could see some sideways trading in the 1.32 - 1.30 region until then.