GBP/USD retreats sharply, plummets below 1.3900 mark
| • Quickly reverses post-UK data spike.
• Downslide aggravates below 1.39 handle.
• Fails to benefit from persistent USD weakness.
The GBP/USD pair faded post-UK data spiked to closer to mid-1.3900s and was now seen extending the slide farther below the 1.3900 handle.
The British Pound gained spotlight on Friday and witnessed some volatility following a big miss from the UK retail sales data. The pair initially fell on the data but quickly recovered to refresh post-Brexit highs.
The pair again started slipping back and the price-action now seems to suggest that the post-data up-move could have been led by a fat-finger trade.
Moreover, possibilities of some stops being triggered below the 1.3900 handle further seemed to have collaborated towards aggravating the selling pressure over the past hour or so.
Meanwhile, persistent US Dollar selling pressure, backed by concerns of a possible US government shutdown, did little to lend any support and stall the pair's sharp retracement to fresh session lows, around the 1.3870-65 region.
Next on tap would be the release of Prelim UoM Consumer Sentiment from the US, which along with Fedspeaks might provide some fresh impetus on the last trading day of the week.
Technical levels to watch
Any subsequent weakness is likely to find support near the 1.3840-35 region, below which the corrective slide could get extended towards the 1.3800 handle. On the upside, momentum back above the 1.3900 handle might continue to confront strong supply near mid-1.3900s, which if cleared sets the stage of a move towards the key 1.40 psychological mark.
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