GBP/USD drops to session low, around mid-1.3000s on awful UK retail sales

The GBP/USD pair failed to capitalize on its early uptick to over one-week tops and dropped to the lower end of its daily trading range, around the 1.3060-50 region post-UK macro data.

Following a brief consolidation, the pair managed to regain some positive traction for the fourth consecutive session but the uptick fizzled out rather quickly following the release of weaker UK monthly retail sales figures.

Pound losses traction on dismal UK retail sales

In fact, the headlines sales declined by 0.6% in December as compared to 0.7% rise expected and the previous month's awful reading was further revised down to -0.8% from -0.6%, which eventually weighed on the British pound.

Adding to this, the yearly growth came in at 0.9% as against 2.6% expected and the previous month’s downwardly revised reading of 0.8%. Meanwhile, sales excluding fuel declined 0.8% MoM and recorded a modest 0.7% YoY growth, again missing estimates by a big margin.

It will now be interesting to see if the pair is able to find any support at lower levels or the current pullback marks the resumption of the prior depreciating move amid concerns that Britain might crash out of the EU at the end of the transition period.

Later during the early North-American session, a slew of second-tier US economic releases might influence the USD price dynamics and further contribute towards producing some short-term trading opportunities.

Technical levels to watch