• Investors looked past today’s upbeat UK retail sales data.
• Resurgent USD demand prompts some aggressive selling.
• Upbeat US macro data adds to the downward pressure.
The GBP/USD pair surrendered upbeat UK retail sales data-led gains to one-week tops and tumbled to fresh session lows in the last hour.
Earlier during the European session, the pair was seen deriving support from upbeat UK retail sales data, coming in to show a stronger than expected 1.3% m/m growth in May, and the post-FOMC US Dollar weakness.
However, a dovish ECB interest rate outlook prompted some aggressive selling around the shared currency and helped ease the bearish pressure surrounding the greenback. This coupled with better-than-expected US monthly retail sales data provided an additional boost to the USD and exerted some additional downward pressure on the major.
Meanwhile, possibilities of some short-term trading stops being triggered on a sustained weakness back below the 1.3400 handle, leading to some fresh technical selling/long-unwinding pressure, could also be seen as one of the factors contributing to the latest leg of sharp fall over the past hour or so.
Currently trading around the 1.3330-25 region, the pair has now retreated over 120-pips from session tops, with a follow-through bearish break, below the 1.3300 handle, now looking a distinct possibility.
Technical levels to watch
The 1.3300 handle is likely to act as an immediate support, which if broken now seems to pave the way for a further near-term depreciating slide towards 1.3240 horizontal support, back closer to YTD lows.
On the upside, any recovery attempts might now confront immediate resistance near the 1.3350-60 region and is followed the 1.3400 handle, which could now keep a lid on any meaningful up-move.
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