• Extends overnight rebound from 1-1/2 week lows.
• A goodish pickup in the US bond yields capping gains.
• US CPI and retail sales data eyed for fresh impetus.
The GBP/USD pair built on previous session up-move and continued gaining some positive traction, for the second consecutive session on Friday.
On Thursday, a strong wave of US Dollar selling pressure, primarily led by a hawkish interpretation of the ECB meeting minutes, helped the pair to rebound sharply from 1-1/2 week lows. The USD lost additional ground in wake of disappointing US economic releases, which further collaborated to the pair's rally of nearly 100-pips from session lows.
Data released on Thursday showed producer prices missed expectations dramatically and plunged in December. The PPI fell 0.1% in the last month of 2017, deflating the most since August 2016 and resurfaced concerns over stubbornly low inflationary pressure.
The up-move, however, now seemed losing steam amid a goodish pickup in the US Treasury bond yields and the pair has now retreated around 25-pips from session tops to currently trade around the 1.3540 region.
There isn't any major market-moving economic data from the UK and hence, investors' focus would remain on important US macro releases - consumer inflation figures and monthly retail sales, which would be looked upon for fresh impetus on the last trading day of the week.
Technical levels to watch
The key 1.3500 psychological mark now seems to protect the immediate downside, which if broken could drag the pair back towards the 1.3460-55 region (previous session's low) en-route its next support near 1.3430 level.
On the upside, momentum above 1.3565 level might confront some resistance near the 1.3585 region, above which the pair seems all set to aim towards retesting monthly tops resistance near the 1.3610-15 zone.
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