GBP/USD consolidating disappointing UK retail sales-led downslide

Haresh Menghani FXStreet

The GBP/USD pair was seen consolidating disappointing retail sales-led weakness and remained well offered near session low around mid-1.2200s.

After yesterday's failed attempt to build on to its recovery momentum above 1.2300 handle, the pair came under fresh selling pressure after UK monthly retail sales figure showed no growth in consumer spending during the month of September.

Moreover, the greenback, as measured by the overall US Dollar Index, continued gaining traction amid optimism led by increasing possibilities of an eventual win for Hillary Clinton at the upcoming US Presidential election in November after the third and final US presidential debate.

Next in focus would be ECB monetary policy decision and comments from ECB President Mario Draghi, at the subsequent press conference, which would drive broader sentiment surrounding the greenback and eventually provide impetus for the GBP/USD traders. Traders will also confront the release of US economic data that include - Philly Fed manufacturing index, weekly jobless claims and existing home sales data later during NA trading session.

Technical levels to watch

On a sustained weakness below 1.2250 immediate support, the pair is likely to head back towards a short-term ascending trend-channel support near 1.2200-1.2190 region. On the upside, 1.2300 handle remains immediate strong hurdle, which if clear seems to boost the pair towards 1.2330 resistance. This 1.2330 level is likely to cap any further up-move, while a decisive move above this strong resistance would negate any near-term bearish bias and open room for further near-term appreciating move for the pair.

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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