GBP/USD off-highs, but holds 1.3500 ahead of UK retail sales

The GBP/USD pair failed yet another attempt to take-out stiff resistances placed near 1.3535 region, now drifting slightly lower towards 1.35 handle.

GBP/USD eyes a test of 1.35 handle?         

The spot formed a Doji candle on daily sticks yesterday, suggesting that the investors are in search of a clear direction, as attention now turns towards the UK retail sales and FOMC policy verdict due later on Wednesday.

Markets expect the UK retail sales to drop slightly in August, which could knock-off the pair back towards the key support near 1.3465 region. Meanwhile, a positive surprise could provide the much-needed impetus to the GBP bulls, driving the prices back above 1.3550 levels.

However, any reaction to the UK data is expected to be limited, as the main risk event for the major today remains the FOMC decision and the DOTS plot chart, which will throw fresh light on the US interest rates outlook and further USD moves.

Ahead of the Fed outcome, the US existing home sales data will be also watched alongside the sentiment on the global equities for some trading opportunities.

GBP/USD levels to consider             

Haresh Menghani, Analyst at FXStreet writes: “On a sustained move beyond the 1.36 handle, the pair is likely to accelerate the up-move towards 1.3660 level before eventually darting towards the 1.3700 round figure mark. The near-term strong bullish trajectory could further get extended even beyond the 1.3800 handle towards testing 61.8% Fibonacci retracement level hurdle near mid-1.3800s. On the flip side, any weakness below the 1.3500 handle might continue to find some support near 1.3470-65 zone, which is closely followed by the ascending trend-channel resistance break-point, now turned support, near the 1.3440-30 region.”