Since coming off the 1.6160 highs, I have believed that a deeper correction was underway. It wouldn’t come fast but it seemed to me that $GBPUSD could correct much of the breakout rally back to the 50% Fib level at 1.58.
However, what has developed this week is a very different story. $GBPUSD has been very reluctant to move too far from the big psychological level at 1.60. Rallies this week met resistance at the Fib levels and dropped to new lows. A correction lower was in progress albeit on a very slow grind. However, today’s UK CBI retail sales release came in much strong than expected causing price to fail with a higher low after the corrective bounce.
The UK recovery story continues to have legs. And as long as that is the case, $GBPUSD remains on course to revisit the highs at 1.63.