The GBP/USD pair caught a fresh bid-wave in Asia and extended its overnight steady rise to reclaim 1.29 handle. However, the bears continue to lurk above the last amid mixed market sentiment and increased nervousness ahead of the key UK retail sales data.
GBP/USD: All eyes on UK retail sales
In the US last session, the spot found support once again near 1.2845 region and staged a solid comeback from there, after a non-favourable FOMC minutes release weighed heavily on the US dollar and Treasury yields.
Meanwhile, a positive surprise seen in the UK jobs report combined with a slack in the US housing sector also collaborated to Cable’s bounce.
So far this session, the GBP/USD pair struggles to take on the recovery above 1.29 handle, as expectations of a drop in the UK retail sales volumes for July continue to undermine the sentiment around the pound.
Also, a recovery in the US yields across the curve dampens the sterling’s attractiveness as an alternative higher-yielding asset.
Data-wise, the main risk event for the major today remains the UK retail sales, while the US dataflow, including the industrial production data will also have a major impact on the prices.
GBP/USD levels to consider
Valeria Bednarik, Chief Analyst at FXStreet noted: “The 4 hours chart shows quite a limited upward potential, given that technical indicators are barely reconverting from oversold levels but still well below their mid-lines, whilst the 20 SMA maintains a sharp bearish slope well above the current level, capping the upside now around 1.2930. Support levels: 1.2830 1.2795 1.2760 Resistance levels: 1.2910 1.2950 1.2990.”
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