GBP/USD dips back below 1.27 handle, fresh 13-month lows post-US data
| • Today’s mostly in-line UK CPI print offset by concerns about a no-deal Brexit.
• The ongoing USD bullish run continues exerting downward pressure.
• Already stronger buck gets an additional boost from upbeat US retail sales data.
After an initial uptick to 1.2735, the GBP/USD pair met with some fresh supply and slipped back below the 1.2700 handle post-US macro data.
With today's mostly in-line UK CPI print doing little to lend any support, the pair extended its near-term bearish trajectory and continues to be weighed down by growing prospects for a no-deal Brexit.
This coupled with the ongoing US Dollar bullish run, further boosted by today's upbeat monthly retail sales data exerted some additional downward pressure during the early North-American session.
According to the data released this Wednesday, the US retail sales recorded a strong m/m growth of 0.5%, as against 0.1% expected, while core retail sales, which exclude automobiles, and control group sales also bettered expectations and posted m/m rise of 0.5% and 0.6% respectively.
Adding to this, an unexpected rise in the Empire State Manufacturing Index, coming in at 25.6 for July as against an expected dip to 20.0, remained supportive of the prevailing strong bullish sentiment around the greenback and did little to ease the bearish pressure.
Technical levels to watch
Any further selling pressure is likely to accelerate the downfall towards 1.2640-35 intermediate support before the pair eventually drops to test the 1.2600 handle. On the flip side, 1.2735-40 area might continue to act as an immediate hurdle, above which the pair could make an attempt to reclaim the 1.2800 round figure mark.
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