Sterling strengthened earlier today on better than expected trade data. Visible trade deficit narrowed more than expected to GBP 6.2b in February, the best reading since June 2006. More importantly, Export rose strongly by 9.5%, to GBP 21.3b which suggests that the weaker Pound is finally driving exports up and help building momentum for recovery in UK. Released overnight, BR retail sales monitor rose 4.4% in March. Housing data from UK were not impressive with RICS house price balance dropped to 9% in March while DCLG house price rose less than expected by 7.4% yoy.

Euro fails to receive any boost from positive Greece bond sales. Greece's treasury bills auction sold EUR 780m 26-week bills at yield of 4.55% with bid - cover ratio of 7.67 times. EUR 780b of 52-week bills were sold at 4.85% yield with bid-to-cover ration of 6.54 times. Data from Eurozone saw German CPI finalized at 0.5% mom, 1.1% yoy in March. German WPI rose 1.3% mom in March too.

Canadian dollar is lifted by larger than expected trade surplus of CAD 1.4b in February. US trade deficit was slightly wider than expected at -39.7b while import price index rose 0.7% mom in March.

GBP/USD Mid-Day Outlook

Daily Pivots: (S1) 1.5318; (P) 1.5401; (R1) 1.5451; More

GBP/USD recovers strongly today but is still staying in range below 1.5485. Intraday bias remains neutral and some more sideway trading could be seen. Also, note that rise from 1.4798 could extend further as long as 1.5128 support holds and above 1.5485 will target 50% retracement of 1.6456 to 1.4783 at 1.5620. Buy after all, there is no change in the view that price actions from 1.4783 are consolidations in the medium term decline. Hence, upside should be limited below 1.5814 cluster resistance and finally bring down trend resumption. On the downside, below 1.5128 will flip intraday bias back to the downside for retesting 1.4783 low.

In the bigger picture, there is no change in our bearish view. That is, medium term rebound from 1.3503, which is treated as a correction to down trend from 2.1161, has completed at 1.7043 already. Fall from there is tentatively treated as resumption of the down trend from 2.1161 and should target a new low below 1.3503. On the upside, break of 1.5814 resistance is needed to invalidate this view. Otherwise, outlook will remain bearish.