The British pound is still adding to its gains following the release of UK retail sales of July which rose by 2.8% y/y while the market was waiting for rising by just 1.4% after 2.6% in June. These data could support the British pound after the market has had earlier this week the first UK CPI annual rising since September 2011 when it reached its previous peak at 5.2% to be in last July 2.6% y/y from 2.4% in June and also yesterday we have seen UK ILO unemployment rate (3m/Juln) declining to 8% with negative claimant jobless count by 5.9k while the market was waiting for rising by 6k from only 1k in June reducing the pressure on BOE to add more funds to its purchasing assets program soon.
The British pound is trading now above its previous resisting level at 1.5730 versus the greenback which came under pressure with increasing of the risk appetite followed a report from Bloomberg has hinted to a close receiving of Euro30 Bln by Spain as first part of its Eur100 Bln rescue plan of its banking sector after the ECB has imposed limits of its granted loans by the governmental bonds.
From another side, the data which have come out from The US housing sector have shown today a mixed stance with rising of July building permits to 0.812m which is the highest figure in the recent 4 years while the market was waiting for rising to 0.770m from 0.755m in June and in the same time decreasing of July housing starts to 0.746 from 0.754 in June while the market was waiting for rising to 0.757m.
So, these data were not enough to trigger serious worries about the housing market showing that it is still in the same stabilized position the Fed's watching in a readiness position to take new easing steps to support the economic activity by the Fed which has already had a positive sign from the jobs market by the rising of US non-farm payrolls to 163k in July from 64k in June showing light pressure on the Fed to take such steps soon giving support to the greenback saving it from being under strong constant pressure.
God willing the cable can meet now in its rising way another resisting level at 1.5777 which was the highest level it has reached following falling to 1.5266 on the first day of last June and it has failed to break it on 20th of last June to fall again to 1.5391 whereas it has formed its bottom on 12th of last July to the current levels and in the case of breaking 1.5777 the pair can meet another resistance at 1.5853 which can open the way for 1.60 psychological level again while easing back again from here can be met with supporting level at 1.5636 which can be followed by 1.5456 which its breaking can lead to 1.5391 again.
FX Market Strategist
Walid Salah El Din