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Similar to the euro, sterling has given back much of the ground gained against the dollar the previous trading day.
Fundamental reports seemed to play a much bigger role in the price action of this pair, though. In the UK, year-over-year CPI and core CPI both missed the mark by coming in at 3.0% and 2.9%, respectively. A small drop in these figures had been forecast; however, when the reports failed to meet these expectations it looked like a natural area for any long positions from yesterday to take profit. Adding a bit more momentum to the GBP slide was a report from the Confederation of British Industry showing that the index for realized sales amongst UK retailers and wholesalers dropped from a reading of 23 all the way down to 13. As we gear up for the US trading session, the pound has found at least some short-term support dead on the 78.6% retracement of yesterday’s move up. How long this recent support lasts may be determined by the Existing Home Sales report out of the US.
