GBP/USD quickly reverses post-UK data dip to sub-1.3000 level, still in the red ahead of US data

   •  The post-FOMC USD upsurge/Brexit uncertainties kept exerting downward pressure.
   •  Mixed UK macro data failed to provide any meaningful support and stall the downfall.

The GBP/USD pair trimmed a part of its early steep slide and quickly recovered around 40-pips from an early European session dip to sub-1.3000 level.

The pair extended its retracement slide from three-week tops set on Wednesday and remained under some intense selling pressure for the second consecutive session. 

Against the backdrop of fading Brexit optimism, the British Pound was further weighed down by today's mixed UK economic data that showed a third consecutive quarterly drop in the total business investment. The data overshadowed mostly in-line preliminary UK GDP print and an unexpected shrinkage in the UK trade deficit. 

Adding to this, a strong follow-through US Dollar upsurge, supported by the Fed's hawkish assessment of the US economy and commitment to continue raising interest rates gradually in the future, dragged the pair to an intraday low level of 1.2987.

The selling pressure now seems to have abated, with the pair quickly bouncing back to the 50/100-day SMA confluence region, around the 1.3025 level, amid a modest USD retracement from closer to monthly tops. 

Traders now look forward to the US economic docket, highlighting the release of PPI figures and Prelim UoM Consumer Sentiment index for November in order to grab some short-term opportunities on the last day of the week. 

Technical outlook

Mario Blascak, FXStreet's own European Chief Analyst explains: “The Relative Strength Index and Slow Stochastics made a bearish turn moving into the oversold territory. The key area of support at 1.3085 was broken and the currency pair is now in the run to close the Monday morning gap at 1.2960 next.”