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The Upside, a break of 1.6150 will allow the GBP to rally higher toward 1.6512 in the mid term. On the downside, below 1.5250 combined with bad news from Europe may send the GBP to 1.4280.
Merkel and Monti signaled there could be a deal in place on Monday and the ECB bond swap seems to be moving forward.
Retail sales in the U.K. rose unexpectedly last month, official data showed on Friday. In a report, U.K. Office for National Statistics said that retail sales rose to 0.9%, from 0.6% in the preceding month .
At a Macro level the US economy is expected to continue strengthening, possibly picking up this spring and summer, the index of leading economic indicators grew 0.4% in January, led by the interest-rate spread and manufacturing hours.
The underlying rate of U.S. inflation accelerated by the fastest pace in four months in January, the Labor Department said Friday. The consumer price index increased 0.2%, driven by the first increase in gasoline prices since September. Food prices rose 0.2 % for the second straight month. The core CPI index, excluding food and energy costs, was up 0.2% in January. Economists were expecting the CPI to rise 0.3% in January after remaining flat in the prior month. The core rate was expected to rise 0.2% after rising 0.1% in the previous month.
The government's consumer price index rose 0.2% in January, just under the 0.3% expected by analysts. The core rate that excludes volatile food and energy prices held at 0.2%, in line with expectations
Americans' cost of living rises 0.2% in January, driven higher by the first increase in energy prices in four months, according to Labor Department data.
The USD should continue to be strong against the GBP, as worries about growth and unemployment continue while the UK is implementing their austerity program.
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Shayne Heffernan oversees the management of funds for institutions and high net worth individuals.
Shayne Heffernan holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services. www.livetradingnews.com