Yesterday CBI retail sales volume balance in the UK in April was -1 vs. expectations for a rise of 7. BBA Loans for House Purchase in March was in line with forecasts, 31.2K. The pound did not drop as Bank of England will extend by one year its plan to provide cheaper loans to companies and consumers and increase incentives to get funds to smaller firms, enhancing a nine-month-old program to aid the economy. The Funding for Lending Scheme (FLS) will make loans to small companies more attractive and be open to non-bank lenders, the BoE said yesterday. The investors expect the published today data on GDP will be strong.
Today at 12:30 GMT+4 UK GDP preliminary in Q1 is released. It is estimated to be 0.1% vs. -0.3 in Q4 2012. If the data is below forecast, it means recession in the UK economy.
Technically, if the data on GDP is not worse than forecast, the price will resume ascending movement to the area of Fibonacci levels 271%-261.8% on the H4 1.5370/84. When this area is passed, the resistance 1.5408 on the daily chart, the trendline which coincides with the level of Fibonacci 271% comes next. When the resistance is broken, the price may reach 1.5433, 236% the level of Fibonacci on the H4.
If the data on UK GDP is disappointing, the price may move again to Fibonacci extension on the H4, 1.5196.
