GBP/USD surrenders post-UK data modest gains, trying to stabilize near 1.2800 handle
| • Upbeat UK retail sales data-led uptick turns out to be rather short-lived.
• Brexit uncertainties continue to dent sentiment surrounding the Pound.
• Renewed USD buying interest exerts some fresh downward pressure.
The GBP/USD pair failed to capitalize on upbeat UK macro data-led uptick and has now retreated back to the 1.2800 neighborhood.
After an initial dip back closer to one-month lows, the pair picked up the pace during the early European session and climbed to an intraday high level of 1.2832 in reaction to stellar UK monthly retail sales figures.
However, growing market fears that the UK will crash out of the EU kept a lid on any strong follow-through, with some renewed US Dollar buying interest exerting some fresh downward pressure in the last hour or so.
With investors looking past Thursday's shockingly poor US monthly retail sales data, the greenback regained some positive traction and was primarily supported by some heavy selling around the shared currency.
The greenback got an additional boost from some renewed optimism over a possible resolution of US-China trade dispute, especially after inspiring trade-related comments by China's President Xi Jinping.
Meanwhile, today's release of stronger than expected Empire State Manufacturing Index from the US, which was largely offset by softer import price index passed unnoticed and did little to provide any meaningful impetus.
Technical outlook
Mario Blascak, FXStreet's own European Chief Analyst writes: “The technical oscillators like the Relative Strength Index (RSI) is flat in the neutral territory while Momentum is trending lower and Slow Stochastics (SS) fell into the Oversold territory.”
“The GBP/USD is sitting at around the 1.2800 level and with the UK retail sales coming out stronger than expected it is likely to re-gain 1.2822 representing a 50-DMA on a daily chart. The 1.2883 representing a 100-DMA is resistance on the upside,” he added further.
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