GBP/USD erases recovery gains after US economic releases
|The GBP/USD pair erased upbeat UK retail sales-led gains to 1.2500 mark and has now turned neutral after US economic releases.
Currently trading around 1.2440 region, the pair lost its recovery momentum and turned neutral following the release of upbeat US macro data. According to the data released just a short while ago, US consumer inflation, as measured by CPI, ticked higher and came-in at 0.4% m-o-m. On the other hand, core CPI (excluding food & energy prices) fell short of consensus estimates but matched previous month's print showing 0.1% rise.
Meanwhile, data from US housing sector, building permits and housing starts surpassed expectations and witnessed a healthy growth for the month of October. Also, the weekly jobless claims for week ended Nov. 11 unexpectedly dropped to 235K as compared to previous week's 254K and reaffirmed the US labor market's underlying strength.
Today's US economic data reinforced market expectations that the Fed would eventually move towards raising interest rates in December and helped the overall US Dollar Index to pare early losses, leading to some selling pressure around the major.
Technical levels to watch
Sustained weakness back below 1.2450 level is likely to drag the pair back towards 1.2400 handle below which a fresh leg of weakness would turn the pair vulnerable to aim towards testing 1.2300 support area. On the upside, 1.2500 psychological mark is likely to provide immediate resistance, which if cleared might continue boosting the pair in the near-term towards testing 50-day SMA important resistance near 1.2595 region.
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