GBP/USD - Below 1.5200

Sterling has opened after the weekend Below 1.5200 from last Fridays gap in the charts, when Sterling dropped 50 pips from 1.5245 to Below the figure.The USD has strengthened across the board and is continuing to be the currency of choice from an economy that is showing signs of a faster recovery than elsewhere. However, Sterling is attracting bids and momentum has slowed down to find support in 1.5160 territories ahead of this weeks data releases.
For the calendar this week, Sterling will be reacting to BoE minutes on Ma 22nd. The latest inflation report from King gave some signs of an improvement in the UK economy, much of which is likely to be priced into the pound, and the minutes may offer further positive comments, reassuring the bulls. However, the pair may come under further pressure should comments divulge any weaknesses going forward. Other key data coming up kicks off tomorrow with CPI and GDP/ Retails Sales on Thursday.
The research team at Commerzbank note the recent break lower and say this is directional. ‘’The market is now under pressure to sell off to 1.5035/28 4th April low and the 20th March low.’’ – Analyst, Karen Jones, Commerzbank. The team goes on to say that the support at 1.4994 is regarded as the last defence for 1.4832, the March low. They mention that short-term rallies are expected to remain capped 1.5335/85 and key resistance is regarded as its 1.5601/50% retracement of the move seen this year, and while capped here the market is viewed as having topped.