GBP/USD quickly recovers post-UK retail sales dip to 1.3900 level
|The GBP/USD pair slipped to the 1.3900 handle in reaction to disappointing UK retail sales data but quickly rebounded back to post-Brexit highs.
The British Pound lost some ground after data released from the UK showed monthly retail sales posted its weakest reading since 2010, contracting 1.5% m-o-m in December.
Meanwhile, the yearly rate also missed consensus estimates and came in to show a growth of 1.4% as against 3.0% expected.
Adding to the disappointment, core retail sales also contracted by 1.6% m-o-m and the yearly rate decelerated to 1.3% during the reported period.
Despite the weaker readings, persistent US Dollar weakness, led by worries over a possible US government shutdown, helped the pair to quickly bounce off lows and refresh daily tops, near mid-1.3900s.
Technical outlook
Mario Blascak, European Chief Analyst at FXStreet writes: “Technically the GBP/USD busted the resistance at $1.3850 representing 61.8% Fibonacci retracement line of post-Brexit slide lower. Although GBP/USD initially failed to close above that key resistance line on Wednesday, its ride higher continued over Thursday with no barrier between the current spot and the round big figure of $1.4000.”
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