GBP/USD bulls struggling to make it through 1.3200 handle

Haresh Menghani FXStreet

• Sticks to UK retail sales data-led modest gains.
• Brexit uncertainty/UK politics could cap additional gains.
• A clear breakthrough needed to confirm bullish bias.

The British Pound held onto UK retail sales-led modest gains and pushed the GBP/USD pair back closer to the 1.3200 handle.

The pair gained some positive traction following the release of better-than-expected UK monthly retail sales data and helped reverse an early dip to the 1.3135 region led by the latest Brexit headlines, which indicated that the EU plans to reject the UK's proposal for a bespoke trade deal.

• UK retail sales stagnate as warm weather saps demand - ING

It would now be interesting to see if bulls are able to continue driving the pair higher or the up-move once again fizzles out above the 1.3200 handle amid concerns over a deadlock on the Brexit settlement bill and the latest political developments in the UK.

• GBP futures: up move lacks conviction

Meanwhile, traders seemed to have largely ignored a goodish pickup in the US Dollar demand, led by a strong rebound in the US Treasury bond yields, with the GBP price dynamics acting as an exclusive driver of the pair's modest up-move.

• GBP resisting the strong dollar - BBH

Today's US economic docket features the release of Philly Fed Manufacturing Index, usual weekly initial jobless claims and industrial production data, which along with the BoE Governor Mark Carney's speech would influence the pair's movement during the early NA session.

Technical levels to watch

Momentum beyond the 1.3200 handle is likely to confront fresh supply near the 1.3225-30 region, above which the pair is likely to dart towards reclaiming the 1.3300 round figure mark.

On the downside, 1.3165 level is likely to act as an immediate support, which if broken could accelerate the fall towards the 1.3110-1.3100 region en-route the 1.3080-70 strong horizontal support.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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