GBP/USD refreshes session tops, awaits a move beyond 1.4100 mark post-US Retail Sales
|- Renewed USD selling bias assisted GBP/USD to regain positive traction on Friday.
- Weaker US Retail Sales report, sliding US bond yields weighed heavily on the buck.
- The lack of any strong follow-through buying warrant caution for bullish traders.
The GBP/USD pair refreshed daily tops in reaction to weaker US Retail Sales figures, with bulls now awaiting a sustained move beyond the 1.4100 mark.
The pair managed to regain positive traction on the last trading day of the week and build on the overnight rebound from the key 1.4000 psychological mark. The uptick was exclusively sponsored by the emergence of some fresh selling around the US dollar, which was being weighed down by declining US Treasury bond yields amid dovish Fed expectations.
The intraday USD selling picked up pace during the early North American session following the disappointing release of US monthly Retail Sales figures for April. In fact, the headline sales remained virtually unchanged during the reported month, marking a sharp deceleration from March's upwardly revised reading of 10.7% (9.8% estimated previously).
Adding to this, sales excluding autos decline 0.8% MoM in April and the closely watched Retail Sales Control Group also fell short of market expectations, coming in at -1.5% as against consensus estimates for a 0.7% growth and -0.2%, respectively. The data reaffirmed the Fed's dovish view and forced investors to trim their bets for an earlier than anticipated tightening.
Despite the supporting factor, the GBP/USD pair struggled to capitalize on the move beyond 100-hour SMA. This, in turn, warrants some caution for bullish traders and makes it prudent to wait for some strong follow-through buying before positioning for any further appreciating move.
Technical levels to watch
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