GBP/USD has just broken below the 1.5000 major psychological level in the past week but the pair appears prime for a retest within the day. Using the Fibonacci retracement tool on the recent swing high and swing low to the 1.4820 area reveals that the 1.4975-1.5000 levels are in line with Fibs.
In addition, stochastic has made a bearish divergence on the 1-hour time frame as the oscillator made higher highs while price made lower highs. Stochastic is still in the overbought region and hasn't crossed down yet, which suggests pound bulls could still be in control at the moment. A cross down from the overbought region will show that sellers have gathered enough momentum to keep the downtrend going.
Yesterday, the U.K. printed a very weak manufacturing production report which showed a 1.5% decline for February. This was way below the consensus of a flat reading for the month. However, the trade balance came in stronger than expected as it showed a deficit of 8.2 billion GBP, smaller than the estimated 8.8 billion GBP shortfall.
No reports are due from the U.K. today but the U.S. retail sales due 1:30 pm GMT could provide enough volatility for this pair. The headline figure is expected to rebound by 0.5% in February while the core version of the report could print a 0.5% uptick as well.
Take note that the recent NFP report printed a strong upside surprise for the same month and that improvements in the jobs sector usually result in a surge for consumer spending. Positive data from the U.S. has been lifting the Greenback so far, which suggests that a potential cable selloff could take place if the report meets or beats expectations.