Cable tumbled by over a cent to a low of 1.9547 after the 09:30GMT disclosure of January's very poor UK retail sales figures. These plummeted by 1.8% m/m, against a forecast rise of 0.2%. The annualized rise of 3.3% came in well below the expected increase of 5.4%.
The unexpectedly soft UK retail sales data has cast doubt on the BoE inflation report's suggestion that another 25bp UK rate hike is in the pipeline. GBP/USD scaled a one-week peak just shy of 1.9680 prior to the data release. 1.9575/80 (earlier absorbed bids) is now a rebound resistance window. Upper obstacles include 1.9600, 1.9622 (today's Asian session base), and 1.9650.
Sub-1.9547 support points are located at 1.9538 (yesterday's pre-BoE inflation report high), 1.9510 (a former stop-loss level), 1.9495 (Wednesday's Asian session peak), 1.9455 (yesterday's low), 1.9420, and 1.9400. There are a raft of US data releases today, inclusive of the 14:00GMT unveiling of December TIC inflows.
Forecast: $60.0bn. Bernanke's monetary policy testimony, part two, begins at 15:00GMT.
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