Short-Covering Could Set GBP USD to 1.6117

News that U.K. Retail Sales rose to their highest level in five monthsis helping to support the GBP USD this morning.  A report showing theeconomy contracted less than expected during the second quarter isproviding additional support.

News that U.K. Retail Sales rose to their highest level in five months is helping to support the GBP USD this morning.  A report showing the economy contracted less than expected during the second quarter is providing additional support. 

Short traders are reacting to the better than expected news by covering positions.  These two reports should not be perceived as position changing reports.  The overall U.K. economy remains fragile as evidenced by the Bank of England’s unanimous decision on September 10th to keep its stimulus plan intact.

Based on the short-term range of 1.6467 to 1.5768, the charts indicate that a retracement to 1.6117 to 1.6200 should be expected before fresh sellers arrive.

James A. Hyerczyk has been actively involved in the futures markets since 1982. He has worked in various capacities within the futures industry from technical analyst to commodity trading advisor. Using W. D. Gann Theory as his core methodology, Mr. Hyerczyk incorporates combinations of pattern, price and time to develop his daily, weekly and monthly analysis. His firm, J.A.H. Research and Trading publishes The Forex Pattern Price Time Report... More

Disclainer: