GBP/USD fades UK retail sales-led spike, retreats back below 1.25 mark
|The GBP/USD pair reversed majority of its upbeat UK data-led gains to fresh monthly tops and has now retreated back below the key 1.25 psychological mark.
Despite of today's stronger retail sales figures, showing a monthly growth of 1.4% in February as compared to 0.4% growth expected and January's 0.5% contraction (revised lower from 0.3% contraction reported earlier), the pair once again failed to build on to its early momentum and ran through some fresh offers near 1.2525 immediate resistance.
Investors seemed reluctant to initiate fresh bullish positions amid prevalent cautious environment following the Westminster terror attack on Wednesday.
Meanwhile, possibilities of some profit taking, in wake of a modest recovery in the US treasury bond yields and the key US Dollar Index, ahead of the Fed Chair Janet Yellen's speech and the key vote on Trump's healthcare bill, could also be one of the reasons behind the pair's inability to extend the up-move.
Neutral Fed messaging but markets find a dovish angle – Standard Chartered
Hence, it would be prudent to wait for fresh impetus before committing to any near-term directional bets.
Technical outlook
Valeria Bednarik, Chief Analyst at FXStreet writes, "if it manages to extend now beyond 1.2540, a Fibonacci resistance, with scope then to extend towards the 1.2570/80 region, en route to 1.2610.Technical readings in the 4 hours chart favor such advance"
"The pair needs to break below 1.2460 to lose the upward potential and turn south, with 1.2425, the 38.2% retracement of the January rally, being the next bearish target" she added.
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